US (United States) Code. Title 7. Chapter 36: Crop Insurance

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Agriculture

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7 USC CHAPTER 36 - CROP INSURANCE 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

.

-HEAD-

CHAPTER 36 - CROP INSURANCE

-MISC1-

Sec.

1501. Short title; application of other laws.

1502. Purpose; definitions; protection of information; relation to

other laws.

(a) Purpose.

(b) Definitions.

(c) Protection of confidential information.

(d) Relation to other laws.

1503. Federal Crop Insurance Corporation; creation; offices.

1504. Capital stock of Corporation.

(a) Subscription by United States.

(b) Appropriations.

(c) Issuance of stock to Secretary of the Treasury.

(d) Cancellation of receipts; nonliability of

Corporation.

1504a. Capitalization of Corporation.

1505. Management of Corporation.

(a) Board of Directors.

(b) Vacancies.

(c) Compensation.

(d) Manager of Corporation.

(e) Expert review of policies, plans of insurance,

and related material.

1506. General powers.

(a) Succession.

(b) Corporate seal.

(c) Property.

(d) Suit.

(e) Bylaws and regulations.

(f) Mails.

(g) Assistance.

(h) Collection and sharing of information.

(i) Expenditures.

(j) Settling claims.

(k) Other powers.

(l) Contracts.

(m) Submission of certain information.

(n) Penalties.

(o) Actuarial soundness.

(p) Regulations.

(q) Purchase of American-made equipment and products.

(r) Procedures for responding to certain inquiries.

1506a, 1506b. Omitted.

1507. Personnel of Corporation.

(a) Appointment; civil service exemption;

compensation.

(b) Application of employees' compensation law.

(c) Use of associations of producers and private

insurance companies; payment of administrative

and program expenses; sale of crop insurance

through private agents and brokers: renewals,

exclusion of compensation from premium rates,

indemnification for errors or omissions of

Commission or its contractors.

(d) Allotment of funds to Federal and State agencies.

(e) Utilization of producer cooperative associations.

(f) Use of resources, data, boards, and committees of

Federal agencies.

(g) Specialty Crops Coordinator.

1508. Crop insurance.

(a) Authority to offer insurance.

(b) Catastrophic risk protection.

(c) General coverage levels.

(d) Premiums.

(e) Payment of portion of premium by Corporation.

(f) Eligibility.

(g) Yield determinations.

(h) Submission of policies and materials to Board.

(i) Adoption of rates and coverages.

(j) Claims for losses.

(k) Reinsurance.

(l) Optional coverages.

(m) Quality loss adjustment coverage.

(n) Limitation on multiple benefits for same loss.

1508a. Double insurance and prevented planting.

(a) Definitions.

(b) Double insurance.

(c) Prevented planting coverage.

(d) Exception for established double cropping

practices.

(e) Subsequent crops.

1509. Exemption of indemnities from levy.

1510. Deposit and investment of funds; Federal Reserve banks as

fiscal agents.

1511. Tax exemption.

1512. Corporation as fiscal agent of Government.

1513. Books of account and annual reports of Corporation.

1514. Crimes and offenses.

(a) to (e) Repealed.

(f) Application of laws on interest of Members of

Congress in contracts.

1515. Program compliance and integrity.

(a) Purpose.

(b) Notification of compliance problems.

(c) Reconciling producer information.

(d) Identification and elimination of fraud, waste,

and abuse.

(e) Consultation with State FSA committees.

(f) Detection of disparate performance.

(g) Submission of information to Corporation to

support compliance efforts.

(h) Sanctions for program noncompliance and fraud.

(i) Annual report on program compliance and integrity

efforts.

(j) Information management.

(k) Funding.

1516. Funding.

(a) Authorization of appropriations.

(b) Payment of Corporation expenses from insurance

fund.

(c) Insurance fund.

1517. Separability.

1518. ''Agricultural commodity'' defined.

1519. Repealed.

1520. Producer eligibility.

1521. Ineligibility for catastrophic risk and noninsured assistance

payments.

1522. Research and development.

(a) Definition of policy.

(b) Reimbursement of research, development, and

maintenance costs.

(c) Research and development contracting authority.

(d) Partnerships for risk management development and

implementation.

(e) Funding.

1523. Pilot programs.

(a) General provisions.

(b) Livestock pilot programs.

(c) Revenue insurance pilot program.

(d) Premium rate reduction pilot program.

(e) Adjusted gross revenue insurance pilot program.

1524. Education and risk management assistance.

(a) Education assistance.

(b) Agricultural management assistance.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 1301, 1391, 6933, 7936,

7996 of this title; title 12 section 1150a; title 21 section 889;

title 26 section 6109; title 42 section 405.

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7 USC Sec. 1501 01/06/03

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TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1501. Short title; application of other laws

-STATUTE-

This chapter may be cited as the ''Federal Crop Insurance Act''.

Except as otherwise expressly provided the provisions in titles I

to IV, inclusive, shall not apply with respect to this chapter, and

the term ''Act'' wherever it appears in such titles shall not be

construed to include this chapter.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 501, 52 Stat. 72.)

-REFTEXT-

REFERENCES IN TEXT

''Titles I to IV, inclusive,'' and ''such titles'', referred to

in text, are references to titles I to IV of act Feb. 16, 1938, ch.

30, 52 Stat. 31, as amended, known as the Agricultural Adjustment

Act of 1938, which is classified principally to chapter 35 (Sec.

1281 et seq.) of this title. For complete classification of this

Act to the Code, see section 1281 of this title and Tables.

-MISC2-

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-224, title I, Sec. 171, June 20, 2000, 114 Stat. 397,

provided that:

''(a) In General. - Except as provided in subsection (b), this

Act (probably means this title, see Tables for classification) and

the amendments made by this Act take effect on the date of the

enactment of this Act (June 20, 2000).

''(b) Exceptions. -

''(1) 2001 fiscal year. - The following provisions and the

amendments made by the provisions take effect on October 1, 2000:

''(A) Subtitle C (Sec. 131-134 of Pub. L. 106-224, enacting

sections 1522 to 1524 of this title and amending sections 1518

and 7331 of this title).

''(B) Section 146 (amending section 1508 of this title).

''(C) Section 163 (114 Stat. 395).

''(2) 2001 crop year. - The amendments made by the following

provisions apply beginning with the 2001 crop of an agricultural

commodity:

''(A) Subsections (a), (b), and (c) of section 101 (amending

section 1508 of this title).

''(B) Section 102(a) (amending section 1508 of this title).

''(C) Subsections (a), (b), and (c) of section 103 (amending

section 1508 of this title and provisions set out as a note

under section 1508 of this title).

''(D) Section 104 (amending section 1508 of this title).

''(E) Section 105(b) (amending section 1508 of this title).

''(F) Section 108 (enacting section 1508a of this title).

''(G) Section 109 (amending section 7333 of this title).

''(H) Section 162 (amending section 1508 of this title).

''(3) 2001 reinsurance year. - The amendments made by the

following provisions apply beginning with the 2001 reinsurance

year:

''(A) Section 101(d) (amending section 1508 of this title).

''(B) Section 102(b) (amending section 1508 of this title).

''(C) Section 103(d) (amending section 1508 of this title).''

SHORT TITLE OF 2000 AMENDMENT

Pub. L. 106-224, Sec. 1(a), June 20, 2000, 114 Stat. 358,

provided that: ''This Act (see Tables for classification) may be

cited as the 'Agricultural Risk Protection Act of 2000'.''

SHORT TITLE OF 1994 AMENDMENT

Pub. L. 103-354, title I, Sec. 101(a), Oct. 13, 1994, 108 Stat.

3179, provided that: ''This title (enacting sections 1433f, 1515,

1521, and 2008f of this title, amending sections 1441-2, 1444-2,

1444f, 1445b-3a, 1502 to 1509, 1511, 1513, 1516, and 1518 to 1520

of this title, sections 901 and 902 of Title 2, The Congress, and

section 1014 of Title 18, Crimes and Criminal Procedure, repealing

sections 1446i and 1508a of this title, enacting provisions set out

as notes under sections 1502, 1506, and 1508 of this title and

sections 901 and 902 of Title 2, and repealing provisions set out

as a note under section 1421 of this title) may be cited as the

'Federal Crop Insurance Reform Act of 1994'.''

SHORT TITLE OF 1980 AMENDMENT

Pub. L. 96-365, Sec. 1, Sept, 26, 1980, 94 Stat. 1312, provided:

''That this Act (amending sections 1441, 1444, 1444c, 1445b, 1504,

1505, 1506, 1507, 1508, 1516, and 1518 and repealing section 1515

of this title and enacting provisions set out as notes under

sections 1504, 1508, and 1516 of this title) may be cited as the

'Federal Crop Insurance Act of 1980'.''

REGULATIONS

Pub. L. 106-224, title I, Sec. 172, June 20, 2000, 114 Stat. 397,

provided that: ''Not later than 120 days after the date of the

enactment of this Act (June 20, 2000), the Secretary of Agriculture

shall promulgate regulations to carry out this Act (probably means

this title, see Tables for classification) and the amendments made

by this Act.''

SAVINGS CLAUSE

Pub. L. 106-224, title I, Sec. 173, June 20, 2000, 114 Stat. 398,

provided that: ''The Federal Crop Insurance Act (7 U.S.C. 1501 et

seq.) and section 196 of the Federal Agriculture Improvement and

Reform Act of 1996 (7 U.S.C. 7333), as in effect on day before the

date of the enactment of this Act (June 20, 2000), shall -

''(1) continue to apply with respect to the 1999 crop year; and

''(2) apply with respect to the 2000 crop year, to the extent

the application of an amendment made by this Act (probably means

this title, see Tables for classification) is delayed under

section 171(b) (set out as an Effective Date of 2000 Amendment

note above) or by the terms of the amendment.''

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7 USC Sec. 1502 01/06/03

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TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1502. Purpose; definitions; protection of information;

relation to other laws

-STATUTE-

(a) Purpose

It is the purpose of this chapter to promote the national welfare

by improving the economic stability of agriculture through a sound

system of crop insurance and providing the means for the research

and experience helpful in devising and establishing such insurance.

(b) Definitions

As used in this chapter:

(1) Additional coverage

The term ''additional coverage'' means a plan of crop insurance

coverage providing a level of coverage greater than the level

available under catastrophic risk protection.

(2) Approved insurance provider

The term ''approved insurance provider'' means a private

insurance provider that has been approved by the Corporation to

provide insurance coverage to producers participating in the

Federal crop insurance program established under this chapter.

(3) Board

The term ''Board'' means the Board of Directors of the

Corporation established under section 1505(a) of this title.

(4) Corporation

The term ''Corporation'' means the Federal Crop Insurance

Corporation established under section 1503 of this title.

(5) Department

The term ''Department'' means the United States Department of

Agriculture.

(6) Loss ratio

The term ''loss ratio'' means the ratio of all sums paid by the

Corporation as indemnities under any eligible crop insurance

policy to that portion of the premium designated for anticipated

losses and a reasonable reserve, other than that portion of the

premium designated for operating and administrative expenses.

(7) Secretary

The term ''Secretary'' means the Secretary of Agriculture.

(8) Transitional yield

The term ''transitional yield'' means the maximum average

production per acre or equivalent measure that is assigned to

acreage for a crop year by the Corporation in accordance with the

regulations of the Corporation whenever the producer fails -

(A) to certify that acceptable documentation of production

and acreage for the crop year is in the possession of the

producer; or

(B) to present the acceptable documentation on the demand of

the Corporation or an insurance company reinsured by the

Corporation.

(c) Protection of confidential information

(1) General prohibition against disclosure

Except as provided in paragraph (2), the Secretary, any other

officer or employee of the Department or an agency thereof, an

approved insurance provider and its employees and contractors,

and any other person may not disclose to the public information

furnished by a producer under this chapter.

(2) Authorized disclosure

(A) Disclosure in statistical or aggregate form

Information described in paragraph (1) may be disclosed to

the public if the information has been transformed into a

statistical or aggregate form that does not allow the

identification of the person who supplied particular

information.

(B) Consent of producer

A producer may consent to the disclosure of information

described in paragraph (1). The participation of the producer

in, and the receipt of any benefit by the producer under, this

chapter or any other program administered by the Secretary may

not be conditioned on the producer providing consent under this

paragraph.

(3) Violations; penalties

Section 2276(c) of this title shall apply with respect to the

release of information collected in any manner or for any purpose

prohibited by this subsection.

(d) Relation to other laws

(1) Terms and conditions of policies and plans

The terms and conditions of any policy or plan of insurance

offered under this chapter that is reinsured by the Corporation

shall not -

(A) be subject to the jurisdiction of the Commodity Futures

Trading Commission or the Securities and Exchange Commission;

or

(B) be considered to be accounts, agreements (including any

transaction that is of the character of, or is commonly known

to the trade as, an ''option'', ''privilege'', ''indemnity'',

''bid'', ''offer'', ''put'', ''call'', ''advance guaranty'', or

''decline guaranty''), or transactions involving contracts of

sale of a commodity for future delivery, traded or executed on

a contract market for the purposes of the Commodity Exchange

Act (7 U.S.C. 1 et seq.).

(2) Effect on CFTC and Commodity Exchange Act

Nothing in this chapter affects the jurisdiction of the

Commodity Futures Trading Commission or the applicability of the

Commodity Exchange Act (7 U.S.C. 1 et seq.) to any transaction

conducted on a contract market under that Act by an approved

insurance provider to offset the approved insurance provider's

risk under a plan or policy of insurance under this chapter.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 502, 52 Stat. 72; June 21,

1941, ch. 214, Sec. 1, 55 Stat. 255; Aug. 1, 1947, ch. 440, Sec. 4,

61 Stat. 719; Pub. L. 103-354, title I, Sec. 102(a), Oct. 13, 1994,

108 Stat. 3180; Pub. L. 106-224, title I, Sec. 122, 141, June 20,

2000, 114 Stat. 377, 389.)

-REFTEXT-

REFERENCES IN TEXT

The Commodity Exchange Act, referred to in subsec. (d)(1)(B),

(2), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, as amended,

which is classified generally to chapter 1 (Sec. 1 et seq.) of this

title. For complete classification of this Act to the Code, see

section 1 of this title and Tables.

-MISC2-

AMENDMENTS

2000 - Subsec. (c). Pub. L. 106-224, Sec. 122, added subsec. (c).

Subsec. (d). Pub. L. 106-224, Sec. 141, added subsec. (d).

1994 - Pub. L. 103-354 substituted ''Purpose and definitions''

for ''Declaration of purpose'' in section catchline, designated

existing text as subsec. (a) and added heading, and added subsec.

(b).

1947 - Act Aug. 1, 1947, amended section generally, restating

purpose of chapter to improve all agriculture by crop insurance

instead of being limited only to wheat.

1941 - Act June 21, 1941, substituted ''crop'' for ''wheat-crop''

and ''agricultural commodities'' for ''wheat''.

EFFECTIVE DATE OF 1994 AMENDMENT

Section 120 of title I of Pub. L. 103-354 provided that: ''Except

as otherwise provided in this title, this title (enacting sections

1433f, 1515, 1521, and 2008f of this title, amending this section

and sections 1441-2, 1444-2, 1444f, 1445b-3a, 1503 to 1509, 1511,

1513, 1516, and 1518 to 1520 of this title, sections 901 and 902 of

Title 2, The Congress, and section 1014 of Title 18, Crimes and

Criminal Procedure, repealing sections 1446i and 1508a of this

title, enacting provisions set out as notes under sections 1501,

1506, and 1508 of this title and sections 901 and 902 of Title 2,

and repealing provisions set out as a note under section 1421 of

this title) and the amendments made by this title shall become

effective on the date of enactment of this Act (Oct. 13, 1994) and

shall apply to the provision of crop insurance under the Federal

Crop Insurance Act (7 U.S.C. 1501 et seq.) beginning with the 1995

crop year. With respect to the 1994 crop year, the Federal Crop

Insurance Act (as in effect on the day before the date of enactment

of this Act) shall continue to apply.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1506, 1515, 8002 of this

title.

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7 USC Sec. 1503 01/06/03

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TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1503. Federal Crop Insurance Corporation; creation; offices

-STATUTE-

To carry out the purposes of this chapter, there is hereby

created as an agency of and within the Department a body corporate

with the name ''Federal Crop Insurance Corporation''. The principal

office of the Corporation shall be located in the District of

Columbia, but there may be established agencies or branch offices

elsewhere in the United States under rules and regulations

prescribed by the Board.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 503, 52 Stat. 72; Pub. L.

103-354, title I, Sec. 102(b)(1), (4)(A), (B), Oct. 13, 1994, 108

Stat. 3180, 3181.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 in first sentence struck out ''of

Agriculture'' after ''Department'' and ''(herein called the

Corporation)'' before period at end, and in second sentence struck

out ''of Directors'' after ''Board''.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

-TRANS-

TRANSFER OF FUNCTIONS

Under authority of Ex. Ord. No. 9577, June 29, 1945, Secretary of

Agriculture consolidated administration of program of Federal Crop

Insurance Corporation in Production and Marketing Administration by

Memorandum 1118, Aug. 18, 1945. 1946 Reorg. Plan No. 3, Sec. 501,

eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100, set out in the

Appendix to Title 5, Government Organization and Employees,

transferred administration of program of Federal Crop Insurance

Corporation to Secretary of Agriculture. In his letter to Congress

President stated that purpose of this transfer was to permit

Secretary of Agriculture to continue consolidation already effected

in Production and Marketing Administration.

Federal Crop Insurance Corporation consolidated with other

agencies into Agricultural Conservation and Adjustment

Administration for duration of war, see Ex. Ord. No. 9069.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1502 of this title.

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7 USC Sec. 1504 01/06/03

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TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1504. Capital stock of Corporation

-STATUTE-

(a) Subscription by United States

The Corporation shall have a capital stock of $500,000,000

subscribed by the United States of America, payment for which

shall, with the approval of the Secretary, be subject to call in

whole or in part by the Board.

(b) Appropriations

There is authorized to be appropriated such sums as are necessary

for the purpose of subscribing to the capital stock of the

Corporation.

(c) Issuance of stock to Secretary of the Treasury

Receipts for payments by the United States of America for or on

account of such stock shall be issued by the Corporation to the

Secretary of the Treasury and shall be evidence of the stock

ownership by the United States of America.

(d) Cancellation of receipts; nonliability of Corporation

Within thirty days after September 26, 1980, the Secretary of the

Treasury shall cancel, without consideration, receipts for payments

for or on account of the stock of the Corporation outstanding on

September 26, 1980, and such receipts shall cease to be liabilities

of the Corporation.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 504, 52 Stat. 72; Aug. 25,

1949, ch. 512, Sec. 4, 6, 63 Stat. 665; Pub. L. 95-47, June 16,

1977, 91 Stat. 228; Pub. L. 95-181, Sec. 1, Nov. 15, 1977, 91 Stat.

1373; Pub. L. 96-365, title I, Sec. 101, Sept. 26, 1980, 94 Stat.

1312; Pub. L. 103-354, title I, Sec. 102(b)(2), (4)(C), Oct. 13,

1994, 108 Stat. 3180, 3181.)

-MISC1-

AMENDMENTS

1994 - Subsec. (a). Pub. L. 103-354, Sec. 102(b)(2)(A), (4)(C),

struck out ''of Agriculture'' after ''Secretary'' and ''of

Directors of the Corporation'' after ''Board''.

Subsec. (d). Pub. L. 103-354, Sec. 102(b)(2)(B), struck out

''Federal Crop Insurance'' before ''Corporation outstanding''.

1980 - Subsec. (a). Pub. L. 96-365, Sec. 101(a), substituted

''$500,000,000'' for ''$200,000,000''.

Subsec. (d). Pub. L. 96-365, Sec. 101(b), added subsec. (d).

1977 - Subsec. (a). Pub. L. 95-181 substituted ''$200,000,000''

for ''$150,000,000''.

Pub. L. 95-47 substituted ''$150,000,000'' for ''$100,000,000''.

1949 - Subsec. (a). Act Aug. 25, 1949, Sec. 4, struck out second

sentence relating to restoration of impairment of capital stock.

Subsec. (b). Act Aug. 25, 1949, Sec. 6, authorized appropriations

for subscribing to corporation's capital stock in order to offset

losses suffered prior to time program was placed on an experimental

basis in 1947.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Section 112 of Pub. L. 96-365 provided that: ''Except as

otherwise provided in this Act, the provisions of this Act amending

the Federal Crop Insurance Act (amending sections 1504, 1505 to

1507, 1508, and 1518 of this title and repealing section 1515 of

this title) shall become effective on the date of enactment of this

Act (Sept. 26, 1980).''

Section 101(a) of Pub. L. 96-365 provided that the amendment made

by that section is effective Oct. 1, 1980.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-MISC5-

CANCELLATION OF OUTSTANDING RECEIPTS FOR STOCK IN EXCESS OF

$27,000,000

Section 5 of act Aug. 25, 1949, provided that: ''The Secretary of

the Treasury is authorized and directed to cancel, without

consideration, outstanding receipts for payments for or on account

of the stock of the Corporation in excess of $27,000,000.''

INSTITUTION OF EXPANDED PROGRAM; PAYMENT OF COST FOR FISCAL YEAR

1950

Section 11 of act Aug. 25, 1949, provided that: ''The expanded

program authorized herein (sections 1504, 1505, 1506, 1507, and

1508 of this title) shall be instituted beginning with the 1950

crop year, the additional cost for fiscal year 1950 to be financed,

pending the appropriation of supplemental funds, from any

appropriation available for operating and administrative expenses

of the Corporation for such fiscal year.''

-CITE-

7 USC Sec. 1504a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1504a. Capitalization of Corporation

-STATUTE-

The payment for capital stock in the Federal Crop Insurance

Corporation shall be effected by transfer of funds on the books of

the Treasury Department to the credit of the Corporation.

-SOURCE-

(June 27, 1940, ch. 437, title I, 54 Stat. 640.)

-COD-

CODIFICATION

Section was not enacted as part of the Federal Crop Insurance Act

which comprises this chapter.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-CITE-

7 USC Sec. 1505 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1505. Management of Corporation

-STATUTE-

(a) Board of Directors

(1) Establishment

The management of the Corporation shall be vested in a Board of

Directors subject to the general supervision of the Secretary.

(2) Composition

The Board shall consist of only the following members:

(A) The manager of the Corporation, who shall serve as a

nonvoting ex officio member.

(B) The Under Secretary of Agriculture responsible for the

Federal crop insurance program.

(C) One additional Under Secretary of Agriculture (as

designated by the Secretary).

(D) The Chief Economist of the Department of Agriculture.

(E) One person experienced in the crop insurance business.

(F) One person experienced in reinsurance or the regulation

of insurance.

(G) Four active producers who are policy holders, are from

different geographic areas of the United States, and represent

a cross-section of agricultural commodities grown in the United

States, including at least one specialty crop producer.

(3) Appointment of private sector members

The members of the Board described in subparagraphs (E), (F),

and (G) of paragraph (2) -

(A) shall be appointed by, and hold office at the pleasure

of, the Secretary;

(B) shall not be otherwise employed by the Federal

Government;

(C) shall be appointed to staggered 4-year terms, as

determined by the Secretary; and

(D) shall serve not more than two consecutive terms.

(4) Chairperson

The Board shall select a member of the Board to serve as

Chairperson.

(b) Vacancies

Vacancies in the Board so long as there shall be four members in

office shall not impair the powers of the Board to execute the

functions of the Corporation, and four of the members in office

shall constitute a quorum for the transaction of the business of

the Board.

(c) Compensation

The Directors of the Corporation who are employed in the

Department shall receive no additional compensation for their

services as such Directors but may be allowed necessary traveling

and subsistence expenses when engaged in business of the

Corporation, outside of the District of Columbia. The Directors of

the Corporation who are not employed by the Federal Government

shall be paid such compensation for their services as Directors as

the Secretary shall determine, but such compensation shall not

exceed the daily equivalent of the rate prescribed for grade GS-18

under section 5332 of title 5 when actually employed, and actual

necessary traveling and subsistence expenses, or a per diem

allowance in lieu of subsistence expenses, as authorized by section

5703 of title 5 for persons in Government service employed

intermittently, when on the business of the Corporation away from

their homes or regular places of business.

(d) Manager of Corporation

The manager of the Corporation shall be its chief executive

officer, with such power and authority as may be conferred by the

Board. The manager shall be appointed by, and hold office at the

pleasure of, the Secretary.

(e) Expert review of policies, plans of insurance, and related

material

(1) Review by experts

The Board shall establish procedures under which any policy or

plan of insurance, as well as any related material or

modification of such a policy or plan of insurance, to be offered

under this chapter shall be subject to independent reviews by

persons experienced as actuaries and in underwriting, as

determined by the Board.

(2) Review of Corporation policies and plans

Except as provided in paragraph (3), the Board shall contract

with at least five persons to each conduct a review of the policy

or plan of insurance, of whom -

(A) not more than one person may be employed by the Federal

Government; and

(B) at least one person must be designated by approved

insurance providers pursuant to procedures determined by the

Board.

(3) Review of private submissions

If the reviews under paragraph (1) cover a policy or plan of

insurance, or any related material or modification of a policy or

plan of insurance, submitted under section 1508(h) of this title

-

(A) the Board shall contract with at least five persons to

each conduct a review of the policy or plan of insurance, of

whom -

(i) not more than one person may be employed by the Federal

Government; and

(ii) none may be employed by an approved insurance

provider; and

(B) each review must be completed and submitted to the Board

not later than 30 days prior to the end of the 120-day period

described in section 1508(h)(4)(D) of this title.

(4) Consideration of reviews

The Board shall include reviews conducted under this subsection

as part of the consideration of any policy or plan or insurance,

or any related material or modification of a policy or plan of

insurance, proposed to be offered under this chapter.

(5) Funding of reviews

Each contract to conduct a review under this subsection shall

be funded from amounts made available under section

1516(b)(2)(A)(ii) of this title.

(6) Relation to other authority

The contract authority provided in this subsection is in

addition to any other contracting authority that may be exercised

by the Board under section 1506(l) of this title.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 505, 52 Stat. 72; Aug. 1,

1947, ch. 440, Sec. 8, 61 Stat. 719; Aug. 25, 1949, ch. 512, Sec.

7, 63 Stat. 665; Pub. L. 96-365, title I, Sec. 102, Sept. 26, 1980,

94 Stat. 1312; Pub. L. 103-354, title I, Sec. 102(b)(3), (4), 103,

115(a), Oct. 13, 1994, 108 Stat. 3181, 3204; Pub. L. 106-224, title

I, Sec. 142(a)(1), (b), June 20, 2000, 114 Stat. 389, 390.)

-MISC1-

AMENDMENTS

2000 - Pub. L. 106-224, Sec. 142(a)(1), inserted section

catchline.

Subsec. (a). Pub. L. 106-224, Sec. 142(a)(1), added heading and

text of subsec. (a) and struck out former subsec. (a) which read as

follows: ''The management of the Corporation shall be vested in a

Board subject to the general supervision of the Secretary. The

Board shall consist of the manager of the Corporation, the Under

Secretary of Agriculture responsible for the Federal crop insurance

program, one additional Under Secretary of Agriculture (as

designated by the Secretary of Agriculture), one person experienced

in the crop insurance business who is not otherwise employed by the

Federal Government, and three active farmers who are not otherwise

employed by the Federal Government. The Board shall be appointed

by, and hold office at the pleasure of, the Secretary. The

Secretary shall not be a member of the Board. The Secretary, in

appointing the three active farmers who are not otherwise employed

by the Federal Government, shall ensure that such members are

policyholders and are from different geographic areas of the United

States, in order that diverse agricultural interests in the United

States are at all times represented on the Board.''

Subsec. (e). Pub. L. 106-224, Sec. 142(b), added subsec. (e).

1994 - Subsec. (a). Pub. L. 103-354, Sec. 102(b)(3), (4)(A), (C),

in first sentence struck out ''of Directors (hereinafter called the

'Board')'' after ''Board'' and ''of Agriculture'' after

''Secretary''.

Pub. L. 103-354, Sec. 103, in second sentence struck out ''or

Assistant Secretary'' after ''Corporation, the Under Secretary''

and substituted ''one additional Under Secretary of Agriculture (as

designated by the Secretary of Agriculture)'' for ''the Under

Secretary or Assistant Secretary of Agriculture responsible for the

farm credit programs of the Department of Agriculture''.

Pub. L. 103-354, Sec. 115(a)(1), substituted ''The Board shall be

appointed by, and hold office at the pleasure of, the Secretary.

The Secretary shall not be a member of the Board.'' for former

third sentence which read as follows: ''The Board shall be

appointed by, and hold office at the pleasure of the Secretary, who

shall not, himself, be a member of the Board.''

Pub. L. 103-354, Sec. 102(b)(4)(C), in third sentence struck out

''of Agriculture'' before '', who shall not''.

Subsec. (c). Pub. L. 103-354, Sec. 102(b)(4)(B), (C), struck out

''of Agriculture'' after ''Department'' in first sentence and after

''Secretary'' in second sentence.

Subsec. (d). Pub. L. 103-354, Sec. 102(b)(4)(C), 115(a)(2), in

first sentence struck out ''upon him'' before ''by the Board'', and

in second sentence substituted ''The manager shall'' for ''He

shall'' and struck out ''of Agriculture'' after ''Secretary''.

1980 - Subsec. (a). Pub. L. 96-365, Sec. 102(a), increased Board

membership to seven from five persons; substituted provisions

including on the Board the Under Secretaries or Assistant

Secretaries of Agriculture for crop insurance and farm credit

programs and one person experienced in crop insurance business for

former provisions including on the Board two other Agriculture

Department employees and two persons with insurance business

experience; authorized appointment of three active farmers not

otherwise Federal employees; and required farmer appointees to be

policyholders and representative of agricultural interests of

different geographic areas.

Subsec. (b). Pub. L. 96-365, Sec. 102(b), substituted ''four''

for ''three'' in two places.

Subsec. (c). Pub. L. 96-365, Sec. 102(c), substituted as

limitation on compensation of Directors of the Corporation not

employed by the Federal Government the daily equivalent of rate

prescribed for grade GS-18 under section 5332 of title 5 when

actually employed, and actual necessary traveling and subsistence

expenses, or the per diem allowance in lieu of subsistence

expenses, as authorized by section 5703 of title 5 for persons in

Government service employed intermittently, when on the business of

the Corporation away from their homes or regular places of business

for former limitation of $50 per day when actually employed and

transportation expenses plus not to exceed $10 per diem in lieu of

subsistence expenses when on business of the Corporation away from

their homes or regular places of business.

1949 - Subsec. (c). Act Aug. 25, 1949, reduced compensation of

members of Board of Directors who are not Government employees from

''not to exceed $100 per day'' to ''not to exceed $50 per day'',

and changed from ''subsistence expenses'' to ''transportation

expenses and not to exceed $10 per diem''.

1947 - Act Aug. 1, 1947, amended section generally and, among

other changes, increased membership of Board from three to five,

provided for two members with insurance experience, not Government

employees, increased from two to three the number of members

necessary to carry on functions and to constitute a quorum,

provided for compensation and expenses of Board members not

otherwise Government employed, and for appointment of manager of

corporation by the Secretary of Agriculture instead of being

selected by the Board.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-365 effective Sept. 26, 1980, see section

112 of Pub. L. 96-365, set out as a note under section 1504 of this

title.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-MISC5-

APPOINTMENT OF BOARD OF DIRECTORS BEGINNING FEBRUARY 1, 2001

Pub. L. 106-224, title I, Sec. 142(a)(2), (3), June 20, 2000, 114

Stat. 390, provided that:

''(2) Implementation. - The initial members of the Board of

Directors of the Federal Crop Insurance Corporation required to be

appointed under section 505(a)(3) of the Federal Crop Insurance Act

(7 U.S.C. 1505(a)(3)) (as amended by paragraph (1)) shall be

appointed during the period beginning February 1, 2001, and ending

April 1, 2001.

''(3) Effect on existing board. - A member of the Board of

Directors of the Federal Crop Insurance Corporation on the date of

the enactment of this Act (June 20, 2000) may continue to serve as

a member of the Board until the members referred to in paragraph

(2) are first appointed.''

REFERENCES IN OTHER LAWS TO GS-16, 17, OR 18 PAY RATES

References in laws to the rates of pay for GS-16, 17, or 18, or

to maximum rates of pay under the General Schedule, to be

considered references to rates payable under specified sections of

Title 5, Government Organization and Employees, see section 529

(title I, Sec. 101(c)(1)) of Pub. L. 101-509, set out in a note

under section 5376 of Title 5.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1502, 1516 of this title.

-CITE-

7 USC Sec. 1506 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1506. General powers

-STATUTE-

(a) Succession

The Corporation shall have succession in its corporate name.

(b) Corporate seal

The Corporation may adopt, alter, and use a corporate seal, which

shall be judicially noticed.

(c) Property

The Corporation may purchase or lease and hold such real and

personal property as it deems necessary or convenient in the

transaction of its business, and may dispose of such property held

by it upon such terms as it deems appropriate.

(d) Suit

The Corporation, subject to the provisions of section 1508(j) of

this title, may sue and be sued in its corporate name, but no

attachment, injunction, garnishment, or other similar process,

mesne or final, shall be issued against the Corporation or its

property. The district courts of the United States, including the

district courts of the District of Columbia and of any territory or

possession, shall have exclusive original jurisdiction, without

regard to the amount in controversy, of all suits brought by or

against the Corporation. The Corporation may intervene in any court

in any suit, action, or proceeding in which it has an interest.

Any suit against the Corporation shall be brought in the District

of Columbia, or in the district wherein the plaintiff resides or is

engaged in business.

(e) Bylaws and regulations

The Corporation may adopt, amend, and repeal bylaws, rules, and

regulations governing the manner in which its business may be

conducted and the powers granted to it by law may be exercised and

enjoyed.

(f) Mails

The Corporation shall be entitled to the use of the United States

mails in the same manner as the other executive agencies of the

Government.

(g) Assistance

The Corporation, with the consent of any board, commission,

independent establishment, or executive department of the

Government, including any field service thereof, may avail itself

of the use of information, services, facilities, officials, and

employees thereof in carrying out the provisions of this chapter.

(h) Collection and sharing of information

(1) Surveys and investigations

The Corporation may conduct surveys and investigations relating

to crop insurance, agriculture-related risks and losses, and

other issues related to carrying out this chapter.

(2) Data collection

The Corporation shall assemble data for the purpose of

establishing sound actuarial bases for insurance on agricultural

commodities.

(3) Sharing of records

Notwithstanding section 1502(c) of this title, records

submitted in accordance with this chapter and section 7333 of

this title shall be available to agencies and local offices of

the Department, appropriate State and Federal agencies and

divisions, and approved insurance providers for use in carrying

out this chapter, such section 7333 of this title, and other

agricultural programs.

(i) Expenditures

The Corporation shall determine the character and necessity for

its expenditures under this chapter and the manner in which they

shall be incurred, allowed, and paid, without regard to the

provisions of any other laws governing the expenditure of public

funds and such determinations shall be final and conclusive upon

all other officers of the Government.

(j) Settling claims

The Corporation shall have the authority to make final and

conclusive settlement and adjustment of any claim by or against the

Corporation or a fiscal officer of the Corporation.

(k) Other powers

The Corporation shall have such powers as may be necessary or

appropriate for the exercise of the powers herein specifically

conferred upon the Corporation and all such incidental powers as

are customary in corporations generally.

(l) Contracts

The Corporation may enter into and carry out contracts or

agreements, and issue regulations, necessary in the conduct of its

business, as determined by the Board. State and local laws or rules

shall not apply to contracts, agreements, or regulations of the

Corporation or the parties thereto to the extent that such

contracts, agreements, or regulations provide that such laws or

rules shall not apply, or to the extent that such laws or rules are

inconsistent with such contracts, agreements, or regulations.

(m) Submission of certain information

(1) Social security account and employer identification numbers

The Corporation shall require, as a condition of eligibility

for participation in the multiple peril crop insurance program,

submission of social security account numbers, subject to the

requirements of section 405(c)(2)(C)(iii) (FOOTNOTE 1) of title

42, and employer identification numbers, subject to the

requirements of section 6109(f) of title 26.

(FOOTNOTE 1) See References in Text note below.

(2) Notification by policyholders

Each policyholder shall notify each individual or other entity

that acquires or holds a substantial beneficial interest in such

policyholder of the requirements and limitations under this

chapter.

(3) Identification of holders of substantial interests

The Manager of the Corporation may require each policyholder to

provide to the Manager, at such times and in such manner as

prescribed by the Manager, the name of each individual that holds

or acquires a substantial beneficial interest in the

policyholder.

(4) ''Substantial beneficial interest'' defined

For purposes of this subsection, the term ''substantial

beneficial interest'' means not less than 5 percent of all

beneficial interests in the policyholder.

(n) Penalties

(1) False information

If a person willfully and intentionally provides any false or

inaccurate information to the Corporation or to any insurer with

respect to an insurance plan or policy under this chapter, the

Corporation may, after notice and an opportunity for a hearing on

the record -

(A) impose a civil fine of not to exceed $10,000 on the

person; and

(B) disqualify the person from purchasing catastrophic risk

protection or receiving noninsured assistance for a period of

not to exceed 2 years, or from receiving any other benefit

under this chapter for a period of not to exceed 10 years.

(2) Assessment of penalty

In assessing penalties under this subsection, the Corporation

shall consider the gravity of the violation.

(o) Actuarial soundness

(1) Projected loss ratio as of October 1, 1995

The Corporation shall take such actions as are necessary to

improve the actuarial soundness of Federal multiperil crop

insurance coverage made available under this chapter to achieve,

on and after October 1, 1995, an overall projected loss ratio of

not greater than 1.1, including -

(A) instituting appropriate requirements for documentation of

the actual production history of insured producers to establish

recorded or appraised yields for Federal crop insurance

coverage that more accurately reflect the associated actuarial

risk, except that the Corporation may not carry out this

paragraph in a manner that would prevent beginning farmers (as

defined by the Secretary) from obtaining Federal crop

insurance;

(B) establishing in counties, to the extent practicable, a

crop insurance option based on area yields in a manner that

allows an insured producer to qualify for an indemnity if a

loss has occurred in a specified area in which the farm of the

insured producer is located;

(C) establishing a database that contains the social security

account and employee identification numbers of participating

producers, agents, and loss adjusters and using the numbers to

identify insured producers, agents, and loss adjusters who are

high risk for actuarial purposes and insured producers who have

not documented at least 4 years of production history, to

assess the performance of insurance providers, and for other

purposes permitted by law; and

(D) taking any other measures authorized by law to improve

the actuarial soundness of the Federal crop insurance program

while maintaining fairness and effective coverage for

agricultural producers.

(2) Projected loss ratio as of October 1, 1998

The Corporation shall take such actions, including the

establishment of adequate premiums, as are necessary to improve

the actuarial soundness of Federal multiperil crop insurance made

available under this chapter to achieve, on and after October 1,

1998, an overall projected loss ratio of not greater than 1.075.

(3) Nonstandard classification system

To the extent that the Corporation uses the nonstandard

classification system, the Corporation shall apply the system to

all insured producers in a fair and consistent manner.

(p) Regulations

The Secretary and the Corporation are each authorized to issue

such regulations as are necessary to carry out this chapter.

(q) Purchase of American-made equipment and products

(1) Sense of Congress

It is the sense of Congress that, to the greatest extent

practicable, all equipment and products purchased by the

Corporation using funds made available to the Corporation should

be American-made.

(2) Notice requirement

In providing financial assistance to, or entering into any

contract with, any entity for the purchase of equipment and

products to carry out this chapter, the Corporation, to the

greatest extent practicable, shall provide to the entity a notice

describing the statement made in paragraph (1).

(r) Procedures for responding to certain inquiries

(1) Procedures required

The Corporation shall establish procedures under which the

Corporation will provide a final agency determination in response

to an inquiry regarding the interpretation by the Corporation of

this chapter or any regulation issued under this chapter.

(2) Implementation

Not later than 180 days after June 23, 1998, the Corporation

shall issue regulations to implement this subsection. At a

minimum, the regulations shall establish -

(A) the manner in which inquiries described in paragraph (1)

are required to be submitted to the Corporation; and

(B) a reasonable maximum number of days within which the

Corporation will respond to all inquiries.

(3) Effect of failure to timely respond

If the Corporation fails to respond to an inquiry in accordance

with the procedures established pursuant to this subsection, the

person requesting the interpretation of this chapter or

regulation may assume the interpretation is correct for the

applicable reinsurance year.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 506, 52 Stat. 73; June 21,

1941, ch. 214, Sec. 2, 55 Stat. 255; Aug. 1, 1947, ch. 440, Sec. 7,

61 Stat. 719; Aug. 25, 1949, ch. 512, Sec. 8, 63 Stat. 665; Pub. L.

96-365, title I, Sec. 103, 107(a), Sept. 26, 1980, 94 Stat. 1313,

1317; Pub. L. 101-624, title XXII, Sec. 2201(a), 2202, Nov. 28,

1990, 104 Stat. 3951, 3954; Pub. L. 102-237, title VI, Sec. 601(1),

(2), Dec. 13, 1991, 105 Stat. 1878; Pub. L. 103-66, title XIV, Sec.

1403(a), Aug. 10, 1993, 107 Stat. 333; Pub. L. 103-354, title I,

Sec. 104, 119(f)(1), Oct. 13, 1994, 108 Stat. 3181, 3208; Pub. L.

105-185, title V, Sec. 533, June 23, 1998, 112 Stat. 583; Pub. L.

106-224, title I, Sec. 121(b), 124(b), June 20, 2000, 114 Stat.

377, 378.)

-REFTEXT-

REFERENCES IN TEXT

Section 405(c)(2)(C)(iii) of title 42, referred to in subsec.

(m)(1), was redesignated section 405(c)(2)(C)(iv) of title 42 by

Pub. L. 103-296, title III, Sec. 321(a)(9)(B), Aug. 15, 1994, 108

Stat. 1536.

-MISC2-

AMENDMENTS

2000 - Subsec. (h). Pub. L. 106-224, Sec. 124(b), added subsec.

(h) and struck out heading and text of former subsec. (h). Text

read as follows: ''The Corporation shall assemble data for the

purpose of establishing sound actuarial bases for insurance on

agricultural commodities.''

Subsecs. (q) to (s). Pub. L. 106-224, Sec. 121(b), redesignated

subsecs. (r) and (s) as (q) and (r), respectively, and struck out

former subsec. (q), which related to program compliance by

insurance providers and required notice to any provider of any

error, omission, or failure to follow Corporation regulations or

procedures for which provider may be responsible and which may

result in a debt owed the Corporation.

1998 - Subsec. (s). Pub. L. 105-185 added subsec. (s).

1994 - Subsec. (d). Pub. L. 103-354, Sec. 119(f)(1), substituted

''1508(j)'' for ''1508(f)'' in first sentence.

Subsec. (j). Pub. L. 103-354, Sec. 104(2), added subsec. (j).

Former subsec. (j) redesignated (k).

Subsec. (k). Pub. L. 103-354, Sec. 104(1), redesignated subsec.

(j) as (k). Former subsec. (k) redesignated (l).

Subsec. (l). Pub. L. 103-354, Sec. 104(1), (3), redesignated

subsec. (k) as (l), in first sentence inserted '', and issue

regulations,'' after ''agreements'', and in second sentence

substituted ''contracts, agreements, or regulations'' for

''contracts or agreements'' wherever appearing. Former subsec. (l)

redesignated (m).

Subsec. (m). Pub. L. 103-354, Sec. 104(1), redesignated subsec.

(l) as (m). Former subsec. (m) redesignated (n).

Subsec. (n). Pub. L. 103-354, Sec. 104(1), redesignated subsec.

(m) as (n). Former subsec. (n) redesignated (o).

Subsec. (n)(1)(B). Pub. L. 103-354, Sec. 104(4), added subpar.

(B) and struck out former subpar. (B) which read as follows:

''disqualify the person from receiving any benefit under this

chapter for a period of not to exceed 10 years.''

Subsec. (o). Pub. L. 103-354, Sec. 104(1), (5)(B), redesignated

subsec. (n) as (o) and reenacted heading without change.

Subsec. (o)(1). Pub. L. 103-354, Sec. 104(5)(B), designated

existing provisions as par. (1) and inserted heading. Former par.

(1) redesignated subpar. (A).

Subsec. (o)(1)(A). Pub. L. 103-354, Sec. 104(5)(A), (C),

redesignated former par. (1) as subpar. (A) and substituted ''(as

defined by the Secretary) from obtaining Federal crop insurance''

for ''from obtaining adequate Federal crop insurance, as determined

by the Corporation''.

Subsec. (o)(1)(B). Pub. L. 103-354, Sec. 104(5)(A), redesignated

former par. (2) as subpar. (B).

Subsec. (o)(1)(C). Pub. L. 103-354, Sec. 104(5)(A), (D),

redesignated former par. (3) as subpar. (C) and inserted '',

agents, and loss adjusters'' after ''participating producers'' and

after ''identify insured producers''.

Subsec. (o)(1)(D). Pub. L. 103-354, Sec. 104(5)(A), redesignated

former par. (4) as subpar. (D).

Subsec. (o)(2) to (4). Pub. L. 103-354, Sec. 104(5)(A), (E),

added pars. (2) and (3) and redesignated former pars. (2) to (4) as

subpars. (B) to (D), respectively, of par. (1) and realigned their

margins.

Subsecs. (p) to (r). Pub. L. 103-354, Sec. 104(6), added subsecs.

(p) to (r).

1993 - Subsec. (n). Pub. L. 103-66 added subsec. (n).

1991 - Subsec. (d). Pub. L. 102-237, Sec. 601(1), substituted

''section 1508(f)'' for ''section 1508(c)'' and a period for

semicolon at end.

Subsec. (m)(1). Pub. L. 102-237, Sec. 601(2), in introductory

provisions substituted ''willfully'' for ''wilfully'' and in

subpar. (A) struck out ''to'' after ''exceed''.

1990 - Pub. L. 101-624, Sec. 2202(b)(1), substituted ''General

powers'' for ''General powers of Corporation'' as section catchline

and struck out ''The Corporation - '' before subsec. (a).

Subsec. (a). Pub. L. 101-624, Sec. 2202(b)(2), (13), inserted

heading and ''The Corporation'' and substituted period for

semicolon at end.

Subsec. (b). Pub. L. 101-624, Sec. 2202(b)(3), (13), inserted

heading and ''The Corporation'' and substituted period for

semicolon at end.

Subsec. (c). Pub. L. 101-624, Sec. 2202(b)(4), (13), inserted

heading and ''The Corporation'' and substituted period for

semicolon at end.

Subsec. (d). Pub. L. 101-624, Sec. 2202(b)(5), inserted heading

and ''The Corporation,''.

Subsec. (e). Pub. L. 101-624, Sec. 2202(b)(6), (13), inserted

heading and ''The Corporation'' and substituted period for

semicolon at end.

Subsec. (f). Pub. L. 101-624, Sec. 2202(b)(7), (13), inserted

heading and ''The Corporation'' and substituted period for

semicolon at end.

Subsec. (g). Pub. L. 101-624, Sec. 2202(b)(8), (13), inserted

heading and ''The Corporation,'' and substituted period for

semicolon at end.

Subsec. (h). Pub. L. 101-624, Sec. 2202(b)(9), (13), inserted

heading and ''The Corporation'' and substituted period for

semicolon at end.

Subsec. (i). Pub. L. 101-624, Sec. 2202(b)(10), (14), inserted

heading and ''The Corporation'' and substituted period for '';

and'' at end.

Subsec. (j). Pub. L. 101-624, Sec. 2202(b)(11), (14), inserted

heading and ''The Corporation'' and substituted period for '';

and'' at end.

Subsec. (k). Pub. L. 101-624, Sec. 2202(b)(12), inserted heading

and ''The Corporation''.

Subsec. (l). Pub. L. 101-624, Sec. 2201(a), added subsec. (l).

Subsec. (m). Pub. L. 101-624, Sec. 2202(a), added subsec. (m).

1980 - Subsec. (c). Pub. L. 96-365, Sec. 103(1), substituted

''may purchase'' for ''may make contracts and purchase''. See

subsec. (k) of this section.

Subsec. (d). Pub. L. 96-365, Sec. 103(2), substituted provision

granting exclusive original jurisdiction to district courts of the

United States, including district courts of the District of

Columbia and of any territory or possession, for prior grant to any

State court of record having general jurisdiction or any United

States district court, authorized intervention by the Corporation

in proceedings, and required suits against the Corporation to be

brought in the District of Columbia or in district wherein

plaintiff resides or is engaged in business.

Subsec. (f). Pub. L. 96-365, Sec. 103(3), substituted ''use of

the United States mails'' for ''free use of the United States

mails''.

Subsec. (h). Pub. L. 96-365, Sec. 107(a), struck out authority

for conducting researches, surveys, and investigations relating to

crop insurance. See section 1508(i) of this title.

Subsec. (k). Pub. L. 96-365, Sec. 103(4), added subsec. (k).

1949 - Subsec. (h). Act Aug. 25, 1949, struck out obsolete

language and included authority for a study of the possibility of

developing some type of livestock insurance.

1947 - Subsec. (d). Act Aug. 1, 1947, provided for suits in State

courts of general jurisdiction or in United States district courts

regardless of amount in controversy.

1941 - Subsec. (h). Act June 21, 1941, substituted ''and

preparatory to the application of the chapter to other basic

commodities when so provided by law, shall assemble data relative

to field corn, for the purpose of establishing a satisfactory

actuarial basis for such commodity'' for ''for wheat and other

agricultural commodities.''

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-185, title V, Sec. 537, June 23, 1998, 112 Stat. 584,

provided that: ''Except as provided in section 535 (112 Stat. 583),

this subtitle (subtitle C (Sec. 531-537) of title V of Pub. L.

105-185, amending this section and sections 1508 and 1516 of this

title and enacting provisions set out as notes under this section)

and the amendments made by this subtitle take effect on July 1,

1998.''

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

EFFECTIVE DATE OF 1993 AMENDMENT

Section 1403(c)(1) of Pub. L. 103-66 provided that: ''Except as

provided in paragraph (2), this section (amending this section and

sections 1508 and 1508a of this title) and the amendments made by

this section shall become effective on October 1, 1993.''

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-365 effective Sept. 26, 1980, see section

112 of Pub. L. 96-365, set out as a note under section 1504 of this

title.

REGULATIONS

Section 1403(c)(2) of Pub. L. 103-66 provided that: ''Not later

than 30 days after the date of enactment of this Act (Aug. 10,

1993), the Secretary of Agriculture shall publish, for public

comment, proposed regulations to implement the amendments made by

this section (amending this section and sections 1508 and 1508a of

this title).''

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-MISC5-

REQUIRED TERMS AND CONDITIONS OF STANDARD REINSURANCE AGREEMENTS

Pub. L. 106-224, title I, Sec. 148, June 20, 2000, 114 Stat. 394,

provided that: ''Notwithstanding section 536 of the Agricultural

Research, Extension, and Education Reform Act of 1998 (7 U.S.C.

1506 note; Public Law 105-185), the Federal Crop Insurance

Corporation may renegotiate the Standard Reinsurance Agreement once

during the 2001 through 2005 reinsurance years.''

Pub. L. 105-185, title V, Sec. 536, June 23, 1998, 112 Stat. 584,

provided that:

''(a) Definitions. - In this section, the terms 'approved

insurance provider' and 'Corporation' have the meanings given the

terms in section 502(b) of the Federal Crop Insurance Act (7 U.S.C.

1502(b)).

''(b) Terms and Conditions. -

''(1) Incorporation of amendments. - For each of the 1999 and

subsequent reinsurance years, the Corporation shall ensure that

each Standard Reinsurance Agreement between an approved insurance

provider and the Corporation reflects the amendments to the

Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) that are made

by this subtitle (see Effective Date of 1998 Amendment note

above) to the extent the amendments are applicable to approved

insurance providers.

''(2) Retention of existing provisions. - Except to the extent

necessary to implement the amendments made by this subtitle, each

Standard Reinsurance Agreement described in paragraph (1) shall

contain the following provisions of the Standard Reinsurance

Agreement for the 1998 reinsurance year:

''(A) Section II, concerning the terms of reinsurance and

underwriting gain and loss for an approved insurance provider.

''(B) Section III, concerning the terms for subsidies and

administrative fees for an approved insurance provider.

''(C) Section IV, concerning the terms for loss adjustment

for an approved insurance provider under catastrophic risk

protection.

''(D) Section V.C., concerning interest payments between the

Corporation and an approved insurance provider.

''(E) Section V.I.5., concerning liquidated damages.

''(c) Implementation. - To implement this subtitle and the

amendments made by this subtitle, the Corporation is not required

to amend provisions of the Standard Reinsurance Agreement not

specifically affected by this subtitle or an amendment made by this

subtitle.''

CROP INSURANCE PROVIDER EVALUATION

Section 118 of Pub. L. 103-354 provided that:

''(a) In General. - The Comptroller General of the United States

and the Federal Crop Insurance Corporation (referred to in this

section as the 'Corporation') shall jointly evaluate the financial

arrangement between the Corporation and approved insurance

providers to determine the quality, costs, and efficiencies of

providing the benefits of multiple peril crop insurance to

producers of agricultural commodities covered under the Federal

Crop Insurance Act (7 U.S.C. 1501 et seq.).

''(b) Collection of Information and Proposals. - The Corporation

shall require private insurance providers and agents to supply, and

the private insurance providers and agents shall supply, records

and information necessary to make the determinations and

evaluations required under this section. The Corporation shall

solicit from the approved insurance providers and agents proposals

for modifying or altering the requirements, regulations,

procedures, and processes related to implementing the Federal Crop

Insurance Act to reduce the operating and administrative costs of

the providers and agents.

''(c) Initial Report. - Not later than 180 days after receipt of

information and cost-reduction proposals under subsection (b), the

Corporation shall evaluate the information and proposals obtained

and report the results of the evaluation to the Committee on

Agriculture of the House of Representatives and the Committee on

Agriculture, Nutrition, and Forestry of the Senate.

''(d) Final Report. - Not later than 2 years after the date of

enactment of this Act (Oct. 13, 1994), the Comptroller General and

the Corporation shall submit a final report that provides the

evaluation required under subsection (a) to the Committee on

Agriculture of the House of Representatives and the Committee on

Agriculture, Nutrition, and Forestry of the Senate. In making the

evaluation, the Comptroller General and the Corporation shall -

''(1) consider the changes made by the Corporation in response

to increased program participation resulting from the enactment

of this Act;

''(2) include an evaluation and opinion of the accuracy and

reasonableness of -

''(A) the average actual costs for approved insurance

providers to deliver multiple peril crop insurance;

''(B) the cost per policy of complying with the requirements,

regulations, procedures, and processes of the Federal Crop

Insurance Act;

''(C) the cost differences for various provider firm sizes

and any business delivered by the Federal Government;

''(D) the adequacy of the standard reimbursement for

potential new providers; and

''(E) the identification of any new costs related to the

enactment of this Act not previously identified in the

information reported by the providers;

''(3) compare delivery costs of multiple peril crop insurance

to other insurance coverages that the provider may sell and

determine the extent, if any, to which any funds provided to

carry out the Federal Crop Insurance Act are being used to fund

any other business enterprise operated by the provider;

''(4)(A) assess alternative methods for reimbursing providers

for reasonable and necessary expenses associated with delivery of

multiple peril crop insurance;

''(B) recommend changes under this paragraph that reasonably

demonstrate the need to achieve the greatest operating

efficiencies on the part of the provider and the Corporation has

been recognized; and

''(C) identify areas for improved operating efficiencies, if

any, in the requirements made by the Corporation for compliance

and program integrity;

''(5) assess the potential for alternative forms of reinsurance

arrangements for providers of different firm sizes, taking into

consideration -

''(A) the need to achieve a reasonable return on the capital

of the provider compared to other lines of insurance;

''(B) the relative risk borne by the provider for the

different lines of insurance;

''(C) the availability and price of commercial reinsurance;

and

''(D) any additional costs that may be incurred by the

Federal Government in carrying out the Federal Crop Insurance

Act; and

''(6) include an analysis of the effect of the current or

proposed reinsurance arrangements on providers having different

business levels.

''(e) Information. -

''(1) Privacy. - In conducting the evaluation required by this

section, the Comptroller General and the Corporation shall

maintain the privacy of proprietary information.

''(2) Subpoenas. - The Comptroller General shall have the power

to subpoena information relevant to the evaluation required by

this section from any private insurance provider. The

Comptroller General shall allow the Corporation access to the

information subpoenaed taking into consideration the necessity of

preserving the privacy of proprietary information.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1505, 1515, 1521 of this

title; title 26 section 6109; title 42 section 405.

-CITE-

7 USC Sec. 1506a, 1506b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1506a, 1506b. Omitted

-COD-

CODIFICATION

Section 1506a, act July 30, 1947, ch. 356, title II, Sec. 202, 61

Stat. 550, which related to authority of Federal Crop Insurance

Corporation to make expenditures, was from the Department of

Agriculture Appropriation Act, 1948, and was not repeated in

subsequent appropriation acts.

Section 1506b, acts June 29, 1954, ch. 409, title II, Sec. 201,

68 Stat. 317; May 23, 1955, ch. 43, title II, Sec. 201, 69 Stat.

60; June 4, 1956, ch. 355, title II, Sec. 201, 70 Stat. 238, which

provided that crop inspection costs and loss adjustments could be

considered as nonadministrative or nonoperating expenses, was from

the Department of Agriculture and Farm Credit Administration

Appropriation Acts for fiscal years 1955-57, and was not repeated

in subsequent appropriation acts.

-CITE-

7 USC Sec. 1507 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1507. Personnel of Corporation

-STATUTE-

(a) Appointment; civil service exemption; compensation

The Secretary shall appoint such officers and employees as may be

necessary for the transaction of the business of the Corporation

pursuant to civil-service laws and regulations, fix their

compensation in accordance with the provisions of chapter 51 and

subchapter III of chapter 53 of title 5, define their authority and

duties, and delegate to them such of the powers vested in the

Corporation as the Secretary may determine appropriate. However,

personnel paid by the hour, day, or month when actually employed

may be appointed without regard to civil-service laws and

regulations.

(b) Application of employees' compensation law

Insofar as applicable, the benefits of subchapter I of chapter 81

of title 5, shall extend to persons given employment under the

provisions of this chapter, including the employees of the

committees and associations referred to in subsection (c) of this

section and the members of such committees.

(c) Use of associations of producers and private insurance

companies; payment of administrative and program expenses; sale

of crop insurance through private agents and brokers: renewals,

exclusion of compensation from premium rates, indemnification

for errors or omissions of Commission or its contractors

In the administration of this chapter, the Board shall, to the

maximum extent possible, (1) establish or use committees or

associations of producers and make payments to them to cover the

administrative and program expenses, as determined by the Board,

incurred by them in cooperating in carrying out this chapter, (2)

contract with private insurance companies, private rating bureaus,

and other organizations as appropriate for actuarial services,

services relating to loss adjustment and rating plans of insurance,

and other services to avoid duplication by the Federal Government

of services that are or may readily be available in the private

sector and to enable the Corporation to concentrate on regulating

the provision of insurance under this chapter and evaluating new

products and materials submitted under section 1508(h) or 1523 of

this title, and reimburse such companies for the administrative and

program expenses, as determined by the Board, incurred by them,

under terms and provisions and rates of compensation consistent

with those generally prevailing in the insurance industry, and (3)

encourage the sale of Federal crop insurance through licensed

private insurance agents and brokers and give the insured the right

to renew such insurance for successive terms through such agents

and brokers, in which case the agent or broker shall be reasonably

compensated from premiums paid by the insured for such sales and

renewals recognizing the function of the agent or broker to provide

continuing services while the insurance is in effect: Provided,

That such compensation shall not be included in computations

establishing premium rates. The Board shall provide such agents

and brokers with indemnification, including costs and reasonable

attorney fees, from the Corporation for errors or omissions on the

part of the Corporation or its contractors for which the agent or

broker is sued or held liable, except to the extent the agent or

broker has caused the error or omission. Nothing in this

subsection shall permit the Corporation to contract with other

persons to carry out the responsibility of the Corporation to

review and approve policies, rates, and other materials submitted

under section 1508(h) of this title.

(d) Allotment of funds to Federal and State agencies

The Secretary may allot to bureaus and offices of the Department

or transfer to such other agencies of the State and Federal

Governments that the Secretary requests to assist in carrying out

this chapter any funds made available pursuant to the provisions of

section 1516 of this title.

(e) Utilization of producer cooperative associations

In carrying out the provisions of this chapter the Board may, in

its discretion, utilize producer-owned and producer-controlled

cooperative associations.

(f) Use of resources, data, boards, and committees of Federal

agencies

The Board should use, to the maximum extent possible, the

resources, data, boards, and the committees of (1) the Soil

Conservation Service, in assisting the Board in the classification

of land as to risk and production capability and in the development

of acceptable conservation practices; (2) the Forest Service, in

assisting the Board in the development of a timber insurance plan;

(3) the Agricultural Stabilization and Conservation Service, in

assisting the Board in the determination of individual producer

yields and in serving as a local contact point for farmers where

the Board deems necessary; and (4) other Federal agencies in any

way the Board deems necessary in carrying out this chapter.

(g) Specialty Crops Coordinator

(1) The Corporation shall establish a management-level position

to be known as the Specialty Crops Coordinator.

(2) The Specialty Crops Coordinator shall have primary

responsibility for addressing the needs of specialty crop

producers, and for providing information and advice, in connection

with the activities of the Corporation to improve and expand the

insurance program for specialty crops. In carrying out this

paragraph, the Specialty Crops Coordinator shall act as the liaison

of the Corporation with representatives of specialty crop producers

and assist the Corporation with the knowledge, expertise, and

familiarity of the producers with risk management and production

issues pertaining to specialty crops.

(3) The Specialty Crops Coordinator shall use information

collected from Corporation field office directors in States in

which specialty crops have a significant economic effect and from

other sources, including the extension service and colleges and

universities.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 507, 52 Stat. 73; Aug. 1,

1947, ch. 440, Sec. 6, 61 Stat. 719; Aug. 25, 1949, ch. 512, Sec.

10, 63 Stat. 665; Oct. 28, 1949, ch. 782, title XI, Sec. 1106(a),

63 Stat. 972; Pub. L. 92-310, title II, Sec. 221(b), June 6, 1972,

86 Stat. 205; Pub. L. 96-365, title I, Sec. 104, Sept. 26, 1980, 94

Stat. 1313; Pub. L. 101-624, title XXII, Sec. 2206, Nov. 28, 1990,

104 Stat. 3958; Pub. L. 102-237, title VI, Sec. 601(3), Dec. 13,

1991, 105 Stat. 1878; Pub. L. 103-354, title I, Sec. 102(b)(4)(B),

(C), 105, 115(b), 119(f)(2), Oct. 13, 1994, 108 Stat. 3181, 3182,

3204, 3208; Pub. L. 106-224, title I, Sec. 143, June 20, 2000, 114

Stat. 391.)

-REFTEXT-

REFERENCES IN TEXT

The civil-service laws, referred to in subsec. (a), are set out

in Title 5, Government Organization and Employees. See,

particularly section 3301 et seq. of Title 5.

In subsec. (a), ''chapter 51 and subchapter III of chapter 53 of

title 5'' substituted for ''the Classification Act of 1949'' on

authority of Pub. L. 89-554, Sec. 7(b), Sept. 6, 1966, 80 Stat.

631, the first section of which enacted Title 5, Government

Organization and Employees.

Provisions that authorized personnel paid by the hour, day, or

month when actually employed, and county crop insurance

committeemen to have their compensation fixed without regard to

''the Classification Act of 1923, as amended'' were omitted as

obsolete. Sections 1202 and 1204 of the Classification Act of

1949, 63 Stat. 972, 973 repealed the 1923 Act and all laws or parts

of laws inconsistent with the 1949 Act. While section 1106(a) of

the 1949 Act provided that references in other laws to the 1923 Act

should be held and considered to mean the 1949 Act it did not have

the effect of continuing the exceptions contained in this

subsection because of section 1106(b) which provided that the

application of the 1949 Act to any position, officer, or employee

shall not be affected by section 1106(a). The Classification Act of

1949 was repealed by Act Sept. 6, 1966, Pub. L. 89-554, Sec. 8(a),

80 Stat. 632 (of which section 1 revised and enacted Title 5,

U.S.C., into law). Section 5102 of Title 5, now contains the

applicability provisions of the 1949 Act, and section 5103 of Title

5 authorizes the Office of Personnel Management to determine the

applicability to specific positions and employees.

In subsec. (b), reference to ''subchapter I of chapter 81 of

title 5'' substituted for ''the Act entitled 'An Act to provide

compensation for employees of the United States suffering injuries

while in the performance of their duties, and for other purposes',

approved September 7, 1916, as amended'' on authority of Pub. L.

89-554, Sec. 7(b), Sept. 6, 1966, 80 Stat. 631, the first section

of which enacted Title 5, Government Organization and Employees.

-MISC2-

AMENDMENTS

2000 - Subsec. (c). Pub. L. 106-224, in cl. (2), substituted

''actuarial services, services relating to loss adjustment and

rating plans of insurance,'' for ''actuarial, loss adjustment,''

and inserted ''and to enable the Corporation to concentrate on

regulating the provision of insurance under this chapter and

evaluating new products and materials submitted under section

1508(h) or 1523 of this title'' after ''private sector''.

1994 - Subsec. (a). Pub. L. 103-354, Sec. 105(1), 115(b)(1),

substituted ''as the Secretary may determine appropriate.

However,'' for ''as he may determine: Provided, That'' and struck

out '', and county crop insurance committeemen'' before ''may be

appointed''.

Subsec. (c). Pub. L. 103-354, Sec. 119(f)(2), substituted

''1508(h)'' for ''1508(b)'' in last sentence.

Subsec. (d). Pub. L. 103-354, Sec. 105(2), made technical

amendment to reference to section 1516 of this title and struck out

before period at end '', except that employees or agencies

responsible for administering this chapter in each county shall be

selected and designated by the Corporation and shall be responsible

directly to the Corporation without the intervention of any

intermediate office or agency''.

Pub. L. 103-354, Sec. 102(b)(4)(B), (C), 115(b)(2), substituted

''Secretary'' for ''Secretary of Agriculture'', ''Department'' for

''Department of Agriculture'', and ''that the Secretary requests''

for ''as he may request''.

Subsec. (g). Pub. L. 103-354, Sec. 105(3), added subsec. (g).

1991 - Subsec. (c). Pub. L. 102-237 inserted a comma after

''private insurance companies'' in cl. (2).

1990 - Subsec. (c). Pub. L. 101-624 inserted ''private rating

bureaus, and other organizations as appropriate for actuarial, loss

adjustment, and other services to avoid duplication by the Federal

Government of services that are or may readily be available in the

private sector,'' after ''private insurance companies'' and

inserted at end ''Nothing in this subsection shall permit the

Corporation to contract with other persons to carry out the

responsibility of the Corporation to review and approve policies,

rates, and other materials submitted under section 1508(b) of this

title.''

1980 - Subsec. (c). Pub. L. 96-365, Sec. 104(1), inserted

''shall, to the maximum extent possible'', incorporated existing

provisions in cl. (1), including in cl. (1) provision for payment

of program expenses, but omitting provision for inclusion of

estimated expenses in insurance premiums, and added cls. (2) and

(3) and provisions for exclusion of compensation from premium rates

and indemnification of agents and brokers for errors or omissions

of Commission or its contractors.

Subsec. (f). Pub. L. 96-365, Sec. 104(2), added subsec. (f).

1972 - Subsec. (a). Pub. L. 92-310 struck out provisions which

empowered Secretary to require bonds of officers and employees.

1949 - Act Oct. 28, 1949, substituted ''Classification Act of

1949'' for ''Classification Act of 1923''.

Act Aug. 25, 1949, inserted requirement that officers and

employees be appointed subject to civil service laws and

regulations, and exempted personnel paid by hour, day, or month

when employed, and county crop-insurance committeemen from

civil-service laws and regulations or the Classification Act of

1923.

1947 - Act Aug. 1, 1947, provided for selection and designation

of county employees and agencies and their direct responsibility.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-365 effective Sept. 26, 1980, see section

112 of Pub. L. 96-365, set out as a note under section 1504 of this

title.

REPEALS

Act Oct. 29, 1949, ch. 782, cited as a credit to this section,

was repealed (subject to a savings clause) by Pub. L. 89-554, Sept.

6, 1966, Sec. 8, 80 Stat. 632, 655.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1508 of this title.

-CITE-

7 USC Sec. 1508 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1508. Crop insurance

-STATUTE-

(a) Authority to offer insurance

(1) In general

If sufficient actuarial data are available (as determined by

the Corporation), the Corporation may insure, or provide

reinsurance for insurers of, producers of agricultural

commodities grown in the United States under 1 or more plans of

insurance determined by the Corporation to be adapted to the

agricultural commodity concerned. To qualify for coverage under

a plan of insurance, the losses of the insured commodity must be

due to drought, flood, or other natural disaster (as determined

by the Secretary).

(2) Period

Except in the cases of tobacco, potatoes, and sweet potatoes,

insurance shall not extend beyond the period during which the

insured commodity is in the field. As used in the preceding

sentence, in the case of an aquacultural species, the term

''field'' means the environment in which the commodity is

produced.

(3) Exclusion of losses due to certain actions of producer

(A) Exclusions

Insurance provided under this subsection shall not cover

losses due to -

(i) the neglect or malfeasance of the producer;

(ii) the failure of the producer to reseed to the same crop

in such areas and under such circumstances as it is customary

to reseed; or

(iii) the failure of the producer to follow good farming

practices, including scientifically sound sustainable and

organic farming practices.

(B) Good farming practices

(i) Informal administrative process

A producer shall have the right to a review of a

determination regarding good farming practices made under

subparagraph (A)(iii) in accordance with an informal

administrative process to be established by the Corporation.

(ii) Administrative review

(I) No adverse decision

The determination shall not be considered an adverse

decision for purposes of subtitle H of the Department of

Agriculture Reorganization Act of 1994 (7 U.S.C. 6991 et

seq.).

(II) Reversal or modification

Except as provided in clause (i), the determination may

not be reversed or modified as the result of a subsequent

administrative review.

(iii) Judicial review

(I) Right to review

A producer shall have the right to judicial review of the

determination without exhausting any right to a review

under clause (i).

(II) Reversal or modification

The determination may not be reversed or modified as the

result of judicial review unless the determination is found

to be arbitrary or capricious.

(C) Limitation on revenue coverage for potatoes

No policy or plan of insurance provided under this chapter

(including a policy or plan of insurance approved by the Board

under subsection (h) of this section) shall cover losses due to

a reduction in revenue for potatoes except as covered under a

whole farm policy or plan of insurance, as determined by the

Corporation.

(4) Expansion to other areas or single producers

(A) Area expansion

The Corporation may offer plans of insurance or reinsurance

for production of agricultural commodities in the Commonwealth

of Puerto Rico, the Virgin Islands, Guam, American Samoa, the

Commonwealth of the Northern Mariana Islands, the Republic of

the Marshall Islands, the Federated States of Micronesia, and

the Republic of Palau in the same manner as provided in this

section for production of agricultural commodities in the

United States.

(B) Producer expansion

In an area in the United States or specified in subparagraph

(A) where crop insurance is not available for a particular

agricultural commodity, the Corporation may offer to enter into

a written agreement with an individual producer operating in

the area for insurance coverage under this chapter if the

producer has actuarially sound data relating to the production

by the producer of the commodity and the data is acceptable to

the Corporation.

(5) Dissemination of crop insurance information

(A) Available information

The Corporation shall make available to producers through

local offices of the Department -

(i) current and complete information on all aspects of

Federal crop insurance; and

(ii) a listing of insurance agents and companies offering

to sell crop insurance in the area of the producers.

(B) Use of electronic methods

(i) Dissemination by Corporation

The Corporation shall make the information described in

subparagraph (A) available electronically to producers and

approved insurance providers.

(ii) Submission to Corporation

To the maximum extent practicable, the Corporation shall

allow producers and approved insurance providers to use

electronic methods to submit information required by the

Corporation.

(6) Addition of new and specialty crops

(A) Data collection

Not later than 180 days after October 13, 1994, the Secretary

shall issue guidelines for publication in the Federal Register

for data collection to assist the Corporation in formulating

crop insurance policies for new and specialty crops.

(B) Addition of new crops

Not later than 1 year after October 13, 1994, and annually

thereafter, the Corporation shall report to Congress on the

progress and expected timetable for expanding crop insurance

coverage under this chapter to new and specialty crops.

(C) Addition of direct sale perishable crops

Not later than 1 year after October 13, 1994, the Corporation

shall report to Congress on the feasibility of offering a crop

insurance program designed to meet the needs of specialized

producers of vegetables and other perishable crops who market

through direct marketing channels.

(D) Addition of nursery crops

Not later than 2 years after April 4, 1996, the Corporation

shall conduct a study and limited pilot program on the

feasibility of insuring nursery crops.

(7) Adequate coverage for States

(A) Definition of adequately served

In this paragraph, the term ''adequately served'' means

having a participation rate that is at least 50 percent of the

national average participation rate.

(B) Review

The Board shall review the policies and plans of insurance

that are offered by approved insurance providers under this

chapter to determine if each State is adequately served by the

policies and plans of insurance.

(C) Report

(i) In general

Not later than 30 days after completion of the review under

subparagraph (B), the Board shall submit to Congress a report

on the results of the review.

(ii) Recommendations

The report shall include recommendations to increase

participation in States that are not adequately served by the

policies and plans of insurance.

(8) Special provisions for cotton and rice

Notwithstanding any other provision of this chapter, beginning

with the 2001 crops of upland cotton, extra long staple cotton,

and rice, the Corporation shall offer plans of insurance,

including prevented planting coverage and replanting coverage,

under this chapter that cover losses of upland cotton, extra long

staple cotton, and rice resulting from failure of irrigation

water supplies due to drought and saltwater intrusion.

(b) Catastrophic risk protection

(1) In general

The Corporation shall offer a catastrophic risk protection plan

to indemnify producers for crop loss due to loss of yield or

prevented planting, if provided by the Corporation, when the

producer is unable, because of drought, flood, or other natural

disaster (as determined by the Secretary), to plant other crops

for harvest on the acreage for the crop year.

(2) Amount of coverage

(A) In general

Subject to subparagraph (B) -

(i) in the case of each of the 1995 through 1998 crop

years, catastrophic risk protection shall offer a producer

coverage for a 50 percent loss in yield, on an individual

yield or area yield basis, indemnified at 60 percent of the

expected market price, or a comparable coverage (as

determined by the Corporation); and

(ii) in the case of each of the 1999 and subsequent crop

years, catastrophic risk protection shall offer a producer

coverage for a 50 percent loss in yield, on an individual

yield or area yield basis, indemnified at 55 percent of the

expected market price, or a comparable coverage (as

determined by the Corporation).

(B) Reduction in actual payment

The amount paid to a producer on a claim under catastrophic

risk protection may reflect a reduction that is proportional to

the out-of-pocket expenses that are not incurred by the

producer as a result of not planting, growing, or harvesting

the crop for which the claim is made, as determined by the

Corporation.

(3) Alternative catastrophic coverage

Beginning with the 2001 crop year, the Corporation shall offer

producers of an agricultural commodity the option of selecting

either of the following:

(A) The catastrophic risk protection coverage available under

paragraph (2)(A).

(B) An alternative catastrophic risk protection coverage that

-

(i) indemnifies the producer on an area yield and loss

basis if such a policy or plan of insurance is offered for

the agricultural commodity in the county in which the farm is

located;

(ii) provides, on a uniform national basis, a higher

combination of yield and price protection than the coverage

available under paragraph (2)(A); and

(iii) the Corporation determines is comparable to the

coverage available under paragraph (2)(A) for purposes of

subsection (e)(2)(A) of this section.

(4) Sale of catastrophic risk coverage

(A) In general

Catastrophic risk coverage may be offered by -

(i) approved insurance providers, if available in an area;

and

(ii) at the option of the Secretary that is based on

considerations of need, local offices of the Department.

(B) Need

For purposes of considering need under subparagraph (A)(ii),

the Secretary may take into account the most efficient and

cost-effective use of resources, the availability of personnel,

fairness to local producers, the needs and convenience of local

producers, and the availability of private insurance carriers.

(C) Delivery of coverage

(i) In general

In full consultation with approved insurance providers, the

Secretary may continue to offer catastrophic risk protection

in a State (or a portion of a State) through local offices of

the Department if the Secretary determines that there is an

insufficient number of approved insurance providers operating

in the State or portion of the State to adequately provide

catastrophic risk protection coverage to producers.

(ii) Coverage by approved insurance providers

To the extent that catastrophic risk protection coverage by

approved insurance providers is sufficiently available in a

State (or a portion of a State) as determined by the

Secretary, only approved insurance providers may provide the

coverage in the State or portion of the State.

(iii) Timing of determinations

Not later than 90 days after April 4, 1996, the Secretary

shall announce the results of the determinations under clause

(i) for policies for the 1997 crop year. For subsequent crop

years, the Secretary shall make the announcement not later

than April 30 of the year preceding the year in which the

crop will be produced, or at such other times during the year

as the Secretary finds practicable in consultation with

affected crop insurance providers for those States (or

portions of States) in which catastrophic coverage remains

available through local offices of the Department.

(iv) Current policies

This clause shall take effect beginning with the 1997 crop

year. Subject to clause (ii) all catastrophic risk

protection policies written by local offices of the

Department shall be transferred to the approved insurance

provider for performance of all sales, service, and loss

adjustment functions. Any fees in connection with such

policies that are not yet collected at the time of the

transfer shall be payable to the approved insurance providers

assuming the policies. The transfer process for policies for

the 1997 crop year with sales closing dates before January 1,

1997, shall begin at the time of the Secretary's announcement

under clause (iii) and be completed by the sales closing date

for the crop and county. The transfer process for all

subsequent policies (including policies for the 1998 and

subsequent crop years) shall begin at a date that permits the

process to be completed not later than 45 days before the

sales closing date.

(5) Administrative fee

(A) Basic fee

Each producer shall pay an administrative fee for

catastrophic risk protection in an amount equal to 10 percent

of the premium for the catastrophic risk protection or $100 per

crop per county, whichever is greater, as determined by the

Corporation.

(B) Payment on behalf of producers

(i) Payment authorized

If State law permits a licensing fee or other payment to be

paid by an insurance provider to a cooperative association or

trade association and rebated to a producer with catastrophic

risk protection or additional coverage, a cooperative

association or trade association located in that State may

pay, on behalf of a member of the association in that State

or a contiguous State who consents to be insured under such

an arrangement, all or a portion of the administrative fee

required by this paragraph for catastrophic risk protection.

(ii) Treatment of licensing fees

A licensing fee or other payment made by an insurance

provider to the cooperative association or trade association

in connection with the issuance of catastrophic risk

protection or additional coverage to members of the

cooperative association or trade association shall be subject

to the laws regarding rebates of the State in which the fee

or other payment is made.

(iii) Selection of provider

Nothing in this subparagraph limits the option of a

producer to select the licensed insurance agent or other

approved insurance provider from whom the producer will

purchase a policy or plan of insurance or to refuse coverage

for which a payment is offered to be made under clause (i).

(iv) Delivery of insurance

A policy or plan of insurance for which a payment is made

under clause (i) shall be delivered by a licensed insurance

agent or other approved insurance provider.

(v) Additional coverage encouraged

A cooperative association or trade association, and any

approved insurance provider with whom a licensing fee or

other arrangement under this subparagraph is made, shall

encourage producer members to purchase appropriate levels of

additional coverage in order to meet the risk management

needs of the member producers.

(vi) Report

Not later than April 1, 2002, the Secretary shall submit to

the Committee on Agriculture of the House of Representatives

and the Committee on Agriculture, Nutrition, and Forestry of

the Senate a report that evaluates -

(I) the operation of this subparagraph; and

(II) the impact of this subparagraph on participation in

the Federal crop insurance program, including the impact on

levels of coverage purchased.

(C) Time for payment

The administrative fee required by this paragraph shall be

paid by the producer on the date that premium for a policy of

additional coverage would be paid by the producer.

(D) Use of fees

(i) In general

The amounts paid under this paragraph shall be deposited in

the crop insurance fund established under section 1516(c) of

this title, to be available for the programs and activities

of the Corporation.

(ii) Limitation

No funds deposited in the crop insurance fund under this

subparagraph may be used to compensate an approved insurance

provider or agent for the delivery of services under this

subsection.

(E) Waiver of fee

The Corporation shall waive the amounts required under this

paragraph for limited resource farmers, as defined by the

Corporation.

(6) Participation requirement

A producer may obtain catastrophic risk coverage for a crop of

the producer on land in the county only if the producer obtains

the coverage for the crop on all insurable land of the producer

in the county.

(7) Eligibility for Department programs

(A) In general

Effective for the spring-planted 1996 and subsequent crops

(and fall-planted 1996 crops at the option of the Secretary),

to be eligible for any payment or loan under the Agricultural

Market Transition Act (7 U.S.C. 7201 et seq.), for the

conservation reserve program, or for any benefit described in

section 2008f of this title, a person shall -

(i) obtain at least the catastrophic level of insurance for

each crop of economic significance in which the person has an

interest; or

(ii) provide a written waiver to the Secretary that waives

any eligibility for emergency crop loss assistance in

connection with the crop.

(B) ''Crop of economic significance'' defined

As used in this paragraph, the term ''crop of economic

significance'' means a crop that has contributed, or is

expected to contribute, 10 percent or more of the total

expected value of all crops grown by the producer.

(8) Limitation due to risk

The Corporation may limit catastrophic risk coverage in any

county or area, or on any farm, on the basis of the insurance

risk concerned.

(9) Transitional coverage for 1995 crops

Effective only for a 1995 crop planted or for which insurance

attached prior to January 1, 1995, the Corporation shall allow

producers of the crops until not later than the end of the

180-day period beginning on the date of enactment of the Federal

Crop Insurance Reform Act of 1994 (Oct. 13, 1994) to obtain

catastrophic risk protection for the crop. On enactment of such

Act, a producer who made timely purchases of a crop insurance

policy before the date of enactment of such Act, under the

provisions of this chapter then in effect, shall be eligible for

the same benefits to which a producer would be entitled under

comparable additional coverage under subsection (c) of this

section.

(10) Simplification

(A) Catastrophic risk protection plans

In developing and carrying out the policies and procedures

for a catastrophic risk protection plan under this chapter, the

Corporation shall, to the maximum extent practicable, minimize

the paperwork required and the complexity and costs of

procedures governing applications for, processing, and

servicing of the plan for all parties involved.

(B) Other plans

To the extent that the policies and procedures developed

under subparagraph (A) may be applied to other plans of

insurance offered under this chapter without jeopardizing the

actuarial soundness or integrity of the crop insurance program,

the Corporation shall apply the policies and procedures to the

other plans of insurance within a reasonable period of time (as

determined by the Corporation) after the effective date of this

paragraph.

(11) Loss adjustment

The rate for reimbursing an approved insurance provider or

agent for expenses incurred by the approved insurance provider or

agent for loss adjustment in connection with a policy of

catastrophic risk protection shall not exceed 8 percent of the

premium for catastrophic risk protection that is used to define

loss ratio.

(c) General coverage levels

(1) Additional coverage generally

(A) In general

The Corporation shall offer to producers of agricultural

commodities grown in the United States plans of crop insurance

that provide additional coverage.

(B) Purchase

To be eligible for additional coverage, a producer must apply

to an approved insurance provider for purchase of additional

coverage if the coverage is available from an approved

insurance provider. If additional coverage is unavailable

privately, the Corporation may offer additional coverage plans

of insurance directly to producers.

(2) Transfer of relevant information

If a producer has already applied for catastrophic risk

protection at the local office of the Department and elects to

purchase additional coverage, the relevant information for the

crop of the producer shall be transferred to the approved

insurance provider servicing the additional coverage crop policy.

(3) Yield and loss basis

A producer shall have the option of purchasing additional

coverage based on an individual yield and loss basis or on an

area yield and loss basis, if both options are offered by the

Corporation.

(4) Level of coverage

The level of coverage shall be dollar denominated and may be

purchased at any level not to exceed 85 percent of the individual

yield or 95 percent of the area yield (as determined by the

Corporation). Not later than the beginning of the 1996 crop year,

the Corporation shall provide producers with information on

catastrophic risk and additional coverage in terms of dollar

coverage (within the allowable limits of coverage provided in

this paragraph).

(5) Expected market price

(A) Establishment or approval

For the purposes of this chapter, the Corporation shall

establish or approve the price level (referred to in this

chapter as the ''expected market price'') of each agricultural

commodity for which insurance is offered.

(B) General rule

Except as otherwise provided in subparagraph (C), the

expected market price of an agricultural commodity shall be not

less than the projected market price of the agricultural

commodity, as determined by the Corporation.

(C) Other authorized approaches

The expected market price of an agricultural commodity -

(i) may be based on the actual market price of the

agricultural commodity at the time of harvest, as determined

by the Corporation;

(ii) in the case of revenue and other similar plans of

insurance, may be the actual market price of the agricultural

commodity, as determined by the Corporation;

(iii) in the case of cost of production or similar plans of

insurance, shall be the projected cost of producing the

agricultural commodity, as determined by the Corporation; or

(iv) in the case of other plans of insurance, may be an

appropriate amount, as determined by the Corporation.

(6) Price elections

(A) In general

Subject to subparagraph (B), insurance coverage shall be made

available to a producer on the basis of any price election that

equals or is less than the price election established by the

Corporation. The coverage shall be quoted in terms of dollars

per acre.

(B) Minimum price elections

The Corporation may establish minimum price elections below

which levels of insurance shall not be offered.

(C) Wheat classes and malting barley

The Corporation shall, as the Corporation determines

practicable, offer producers different price elections for

classes of wheat and malting barley (including contract prices

in the case of malting barley), in addition to the standard

price election, that reflect different market prices, as

determined by the Corporation. The Corporation shall, as the

Corporation determines practicable, offer additional coverage

for each class determined under this subparagraph and charge a

premium for each class that is actuarially sound.

(7) Fire and hail coverage

For levels of additional coverage equal to 65 percent or more

of the recorded or appraised average yield indemnified at 100

percent of the expected market price, or an equivalent coverage,

a producer may elect to delete from the additional coverage any

coverage against damage caused by fire and hail if the producer

obtains an equivalent or greater dollar amount of coverage for

damage caused by fire and hail from an approved insurance

provider. On written notice of the election to the company

issuing the policy providing additional coverage and submission

of evidence of substitute coverage on the commodity insured, the

premium of the producer shall be reduced by an amount determined

by the Corporation to be actuarially appropriate, taking into

account the actuarial value of the remaining coverage provided by

the Corporation. In no event shall the producer be given credit

for an amount of premium determined to be greater than the

actuarial value of the protection against losses caused by fire

and hail that is included in the additional coverage for the

crop.

(8) State premium subsidies

The Corporation may enter into an agreement with any State or

agency of a State under which the State or agency may pay to the

approved insurance provider an additional premium subsidy to

further reduce the portion of the premium paid by producers in

the State.

(9) Limitations on additional coverage

The Board may limit the availability of additional coverage

under this subsection in any county or area, or on any farm, on

the basis of the insurance risk involved. The Board shall not

offer additional coverage equal to less than 50 percent of the

recorded or appraised average yield indemnified at 100 percent of

the expected market price, or an equivalent coverage.

(10) Administrative fee

(A) Fee required

If a producer elects to purchase coverage for a crop at a

level in excess of catastrophic risk protection, the producer

shall pay an administrative fee for the additional coverage of

$30 per crop per county.

(B) Use of fees; waiver

Subparagraphs (D) and (E) of subsection (b)(5) of this

section shall apply with respect to the collection and use of

administrative fees under this paragraph.

(d) Premiums

(1) Premiums required

The Corporation shall fix adequate premiums for all the plans

of insurance of the Corporation at such rates as the Board

determines are actuarially sufficient to attain an expected loss

ratio of not greater than 1.1 through September 30, 1998, and not

greater than 1.075 after October 1, 1998.

(2) Premium amounts

The premium amounts for catastrophic risk protection under

subsection (b) of this section and additional coverage under

subsection (c) of this section shall be fixed as follows:

(A) In the case of catastrophic risk protection, the amount

of the premium shall be sufficient to cover anticipated losses

and a reasonable reserve.

(B) In the case of additional coverage equal to or greater

than 50 percent of the recorded or appraised average yield

indemnified at not greater than 100 percent of the expected

market price, or a comparable coverage for a policy or plan of

insurance that is not based on individual yield, the amount of

the premium shall -

(i) be sufficient to cover anticipated losses and a

reasonable reserve; and

(ii) include an amount for operating and administrative

expenses, as determined by the Corporation, on an

industry-wide basis as a percentage of the amount of the

premium used to define loss ratio.

(3) Performance-based discount

The Corporation may provide a performance-based premium

discount for a producer of an agricultural commodity who has good

insurance or production experience relative to other producers of

that agricultural commodity in the same area, as determined by

the Corporation.

(e) Payment of portion of premium by Corporation

(1) In general

For the purpose of encouraging the broadest possible

participation of producers in the catastrophic risk protection

provided under subsection (b) of this section and the additional

coverage provided under subsection (c) of this section, the

Corporation shall pay a part of the premium in the amounts

provided in accordance with this subsection.

(2) Amount of payment

Subject to paragraph (4), the amount of the premium to be paid

by the Corporation shall be as follows:

(A) In the case of catastrophic risk protection, the amount

shall be equivalent to the premium established for catastrophic

risk protection under subsection (d)(2)(A) of this section.

(B) In the case of additional coverage equal to or greater

than 50 percent, but less than 55 percent, of the recorded or

appraised average yield indemnified at not greater than 100

percent of the expected market price, or a comparable coverage

for a policy or plan of insurance that is not based on

individual yield, the amount shall be equal to the sum of -

(i) 67 percent of the amount of the premium established

under subsection (d)(2)(B)(i) of this section for the

coverage level selected; and

(ii) the amount determined under subsection (d)(2)(B)(ii)

of this section for the coverage level selected to cover

operating and administrative expenses.

(C) In the case of additional coverage equal to or greater

than 55 percent, but less than 65 percent, of the recorded or

appraised average yield indemnified at not greater than 100

percent of the expected market price, or a comparable coverage

for a policy or plan of insurance that is not based on

individual yield, the amount shall be equal to the sum of -

(i) 64 percent of the amount of the premium established

under subsection (d)(2)(B)(i) of this section for the

coverage level selected; and

(ii) the amount determined under subsection (d)(2)(B)(ii)

of this section for the coverage level selected to cover

operating and administrative expenses.

(D) In the case of additional coverage equal to or greater

than 65 percent, but less than 75 percent, of the recorded or

appraised average yield indemnified at not greater than 100

percent of the expected market price, or a comparable coverage

for a policy or plan of insurance that is not based on

individual yield, the amount shall be equal to the sum of -

(i) 59 percent of the amount of the premium established

under subsection (d)(2)(B)(i) of this section for the

coverage level selected; and

(ii) the amount determined under subsection (d)(2)(B)(ii)

of this section for the coverage level selected to cover

operating and administrative expenses.

(E) In the case of additional coverage equal to or greater

than 75 percent, but less than 80 percent, of the recorded or

appraised average yield indemnified at not greater than 100

percent of the expected market price, or a comparable coverage

for a policy or plan of insurance that is not based on

individual yield, the amount shall be equal to the sum of -

(i) 55 percent of the amount of the premium established

under subsection (d)(2)(B)(i) of this section for the

coverage level selected; and

(ii) the amount determined under subsection (d)(2)(B)(ii)

of this section for the coverage level selected to cover

operating and administrative expenses.

(F) In the case of additional coverage equal to or greater

than 80 percent, but less than 85 percent, of the recorded or

appraised average yield indemnified at not greater than 100

percent of the expected market price, or a comparable coverage

for a policy or plan of insurance that is not based on

individual yield, the amount shall be equal to the sum of -

(i) 48 percent of the amount of the premium established

under subsection (d)(2)(B)(i) of this section for the

coverage level selected; and

(ii) the amount determined under subsection (d)(2)(B)(ii)

of this section for the coverage level selected to cover

operating and administrative expenses.

(G) Subject to subsection (c)(4) of this section, in the case

of additional coverage equal to or greater than 85 percent of

the recorded or appraised average yield indemnified at not

greater than 100 percent of the expected market price, or a

comparable coverage for a policy or plan of insurance that is

not based on individual yield, the amount shall be equal to the

sum of -

(i) 38 percent of the amount of the premium established

under subsection (d)(2)(B)(i) of this section for the

coverage level selected; and

(ii) the amount determined under subsection (d)(2)(B)(ii)

of this section for the coverage level selected to cover

operating and administrative expenses.

(3) Premium reduction

If an approved insurance provider determines that the provider

may provide insurance more efficiently than the expense

reimbursement amount established by the Corporation, the approved

insurance provider may reduce, subject to the approval of the

Corporation, the premium charged the insured by an amount

corresponding to the efficiency. The approved insurance provider

shall apply to the Corporation for authority to reduce the

premium before making such a reduction, and the reduction shall

be subject to the rules, limitations, and procedures established

by the Corporation.

(4) Prohibition on continuous coverage

Notwithstanding paragraph (2), during each of the 2001 and

subsequent reinsurance years, additional coverage under

subsection (c) of this section shall be available only in 5

percent increments beginning at 50 percent of the recorded or

appraised average yield.

(5) Premium payment disclosure

Each policy or plan of insurance under this chapter shall

prominently indicate the dollar amount of the portion of the

premium paid by the Corporation.

(f) Eligibility

(1) In general

To participate in catastrophic risk protection coverage under

this section, a producer shall submit an application at the local

office of the Department or to an approved insurance provider.

(2) Sales closing date

(A) In general

For coverage under this chapter, each producer shall purchase

crop insurance on or before the sales closing date for the crop

by providing the required information and executing the

required documents. Subject to the goal of ensuring actuarial

soundness for the crop insurance program, the sales closing

date shall be established by the Corporation to maximize

convenience to producers in obtaining benefits under price and

production adjustment programs of the Department.

(B) Established dates

Except as provided in subparagraph (C), the Corporation shall

establish, for an insurance policy for each insurable crop that

is planted in the spring, a sales closing date that is 30 days

earlier than the corresponding sales closing date that was

established for the 1994 crop year.

(C) Exception

If compliance with subparagraph (B) results in a sales

closing date for an agricultural commodity that is earlier than

January 31, the sales closing date for that commodity shall be

January 31 beginning with the 2000 crop year.

(3) Records and reporting

To obtain catastrophic risk protection under subsection (b) of

this section or additional coverage under subsection (c) of this

section, a producer shall -

(A) provide annually records acceptable to the Secretary

regarding crop acreage, acreage yields, and production for each

agricultural commodity insured under this chapter or accept a

yield determined by the Corporation; and

(B) report acreage planted and prevented from planting by the

designated acreage reporting date for the crop and location as

established by the Corporation.

(g) Yield determinations

(1) In general

Subject to paragraph (2), the Corporation shall establish crop

insurance underwriting rules that ensure that yield coverage, as

specified in this subsection, is provided to eligible producers

obtaining catastrophic risk protection under subsection (b) of

this section or additional coverage under subsection (c) of this

section.

(2) Yield coverage plans

(A) Actual production history

Subject to subparagraph (B), the yield for a crop shall be

based on the actual production history for the crop, if the

crop was produced on the farm without penalty during each of

the 4 crop years immediately preceding the crop year for which

actual production history is being established, building up to

a production data base for each of the 10 consecutive crop

years preceding the crop year for which actual production

history is being established.

(B) Assigned yield

If the producer does not provide satisfactory evidence of the

yield of a commodity under subparagraph (A), the producer shall

be assigned -

(i) a yield that is not less than 65 percent of the

transitional yield of the producer (adjusted to reflect

actual production reflected in the records acceptable to the

Corporation for continuous years), as specified in

regulations issued by the Corporation based on production

history requirements; or

(ii) a yield determined by the Corporation, in the case of

-

(I) a producer that has not had a share of the production

of the insured crop for more than two crop years, as

determined by the Secretary;

(II) a producer that produces an agricultural commodity

on land that has not been farmed by the producer; or

(III) a producer that rotates a crop produced on a farm

to a crop that has not been produced on the farm.

(C) Area yield

The Corporation may offer a crop insurance plan based on an

area yield that allows an insured producer to qualify for an

indemnity if a loss has occurred in an area (as specified by

the Corporation) in which the farm of the producer is located.

Under an area yield plan, an insured producer shall be allowed

to select the level of area production at which an indemnity

will be paid consistent with such terms and conditions as are

established by the Corporation.

(D) Commodity-by-commodity basis

A producer may choose between individual yield or area yield

coverage or combined coverage, if available, on a

commodity-by-commodity basis.

(3) Transitional yields for producers of feed or forage

(A) In general

If a producer does not provide satisfactory evidence of a

yield under paragraph (2)(A), the producer shall be assigned a

yield that is at least 80 percent of the transitional yield

established by the Corporation (adjusted to reflect the actual

production history of the producer) if the Secretary determines

that -

(i) the producer grows feed or forage primarily for on-farm

use in a livestock, dairy, or poultry operation; and

(ii) over 50 percent of the net farm income of the producer

is derived from the operation.

(B) Yield calculation

The Corporation shall -

(i) for the first year of participation of a producer,

provide the assigned yield under this paragraph to the

producer of feed or forage; and

(ii) for the second year of participation of the producer,

apply the actual production history or assigned yield

requirement, as provided in this subsection.

(C) Termination of authority

The authority provided by this paragraph shall terminate on

the date that is 3 years after the effective date of this

paragraph.

(4) Adjustment in actual production history to establish

insurable yields

(A) Application

This paragraph shall apply whenever the Corporation uses the

actual production records of the producer to establish the

producer's actual production history for an agricultural

commodity for any of the 2001 and subsequent crop years.

(B) Election to use percentage of transitional yield

If, for one or more of the crop years used to establish the

producer's actual production history of an agricultural

commodity, the producer's recorded or appraised yield of the

commodity was less than 60 percent of the applicable

transitional yield, as determined by the Corporation, the

Corporation shall, at the election of the producer -

(i) exclude any of such recorded or appraised yield; and

(ii) replace each excluded yield with a yield equal to 60

percent of the applicable transitional yield.

(C) Premium adjustment

In the case of a producer that makes an election under

subparagraph (B), the Corporation shall adjust the premium to

reflect the risk associated with the adjustment made in the

actual production history of the producer.

(5) Adjustment to reflect increased yields from successful pest

control efforts

(A) Situations justifying adjustment

The Corporation shall develop a methodology for adjusting the

actual production history of a producer when each of the

following apply:

(i) The producer's farm is located in an area where

systematic, area-wide efforts have been undertaken using

certain operations or measures, or the producer's farm is a

location at which certain operations or measures have been

undertaken, to detect, eradicate, suppress, or control, or at

least to prevent or retard the spread of, a plant disease or

plant pest, including a plant pest (as defined in section

7759 (FOOTNOTE 1) of this title).

(FOOTNOTE 1) See References in Text note below.

(ii) The presence of the plant disease or plant pest has

been found to adversely affect the yield of the agricultural

commodity for which the producer is applying for insurance.

(iii) The efforts described in clause (i) have been

effective.

(B) Adjustment amount

The amount by which the Corporation adjusts the actual

production history of a producer of an agricultural commodity

shall reflect the degree to which the success of the

systematic, area-wide efforts described in subparagraph (A), on

average, increases the yield of the commodity on the producer's

farm, as determined by the Corporation.

(h) Submission of policies and materials to Board

(1) In general

In addition to any standard forms or policies that the Board

may require be made available to producers under subsection (c)

of this section, a person (including an approved insurance

provider, a college or university, a cooperative or trade

association, or any other person) may prepare for submission or

propose to the Board -

(A) other crop insurance policies and provisions of policies;

and

(B) rates of premiums for multiple peril crop insurance

pertaining to wheat, soybeans, field corn, and any other crops

determined by the Secretary.

(2) Submission of policies

A policy or other material submitted to the Board under this

subsection may be prepared without regard to the limitations

contained in this chapter, including the requirements concerning

the levels of coverage and rates and the requirement that a price

level for each commodity insured must equal the expected market

price for the commodity as established by the Board.

(3) Review and approval by the Board

A policy or other material submitted to the Board under this

subsection shall be reviewed by the Board and, if the Board finds

that the interests of producers are adequately protected and that

any premiums charged to the producers are actuarially

appropriate, shall be approved by the Board for reinsurance and

for sale by approved insurance providers to producers as an

additional choice at actuarially appropriate rates and under

appropriate terms and conditions. The Corporation may enter into

more than 1 reinsurance agreement with the approved insurance

provider simultaneously to facilitate the offering of the new

policies.

(4) Guidelines for submission and review

The Corporation shall issue regulations to establish guidelines

for the submission, and Board review, of policies or other

material submitted to the Board under this subsection. At a

minimum, the guidelines shall ensure the following:

(A) Confidentiality

(i) In general

A proposal submitted to the Board under this subsection

(including any information generated from the proposal) shall

be considered to be confidential commercial or financial

information for the purposes of section 552(b)(4) of title 5.

(ii) Standard of confidentiality

If information concerning a proposal could be withheld by

the Secretary under the standard for privileged or

confidential information pertaining to trade secrets and

commercial or financial information under section 552(b)(4)

of title 5, the information shall not be released to the

public.

(iii) Application

This subparagraph shall apply with respect to a proposal

only during the period preceding any approval of the proposal

by the Board.

(B) Personal presentation

The Board shall provide an applicant with the opportunity to

present the proposal to the Board in person if the applicant so

desires.

(C) Notification of intent to disapprove

(i) Time period

The Board shall provide an applicant with notification of

intent to disapprove a proposal not later than 30 days prior

to making the disapproval.

(ii) Modification of application

(I) Authority

An applicant that receives the notification may modify

the application, and such application, as modified, shall

be considered by the Board in the manner provided in

subparagraph (D) within the 30-day period beginning on the

date the modified application is submitted.

(II) Time period

Clause (i) shall not apply to the Board's consideration

of the modified application.

(iii) Explanation

Any notification of intent to disapprove a policy or other

material submitted under this subsection shall be accompanied

by a complete explanation as to the reasons for the Board's

intention to deny approval.

(D) Determination to approve or disapprove policies or

materials

(i) Time period

Not later than 120 days after a policy or other material is

submitted under this subsection, the Board shall make a

determination to approve or disapprove the policy or

material.

(ii) Explanation

Any determination by the Board to disapprove any policy or

other material shall be accompanied by a complete explanation

of the reasons for the Board's decision to deny approval.

(iii) Failure to meet deadline

Notwithstanding any other provision of this chapter, if the

Board fails to make a determination within the prescribed

time period, the submitted policy or other material shall be

deemed approved by the Board for the initial reinsurance year

designated for the policy or material, unless the Board and

the applicant agree to an extension.

(5) Premium schedule

(A) Payment by Corporation

In the case of a policy or plan of insurance developed and

approved under this subsection or section 1522 of this title,

or conducted under section 1523 of this title (other than a

policy or plan of insurance applicable to livestock), the

Corporation shall pay a portion of the premium of the policy or

plan of insurance that is equal to -

(i) the percentage, specified in subsection (e) of this

section for a similar level of coverage, of the total amount

of the premium used to define loss ratio; and

(ii) an amount for administrative and operating expenses

determined in accordance with subsection (k)(4) of this

section.

(B) Transitional schedule

Effective only during the 2001 reinsurance year, in the case

of a policy or plan of insurance developed and approved under

this subsection or section 1522 of this title, or conducted

under section 1523 of this title (other than a policy or plan

of insurance applicable to livestock), and first approved by

the Board after June 20, 2000, the payment by the Corporation

of a portion of the premium of the policy may not exceed the

dollar amount that would otherwise be authorized under

subsection (e) of this section (consistent with subsection

(c)(5) of this section, as in effect on the day before June 20,

2000).

(6) Additional prevented planting policy coverage

(A) In general

Beginning with the 1995 crop year, the Corporation shall

offer to producers additional prevented planting coverage that

insures producers against losses in accordance with this

paragraph.

(B) Approved insurance providers

Additional prevented planting coverage shall be offered by

the Corporation through approved insurance providers.

(C) Timing of loss

A crop loss shall be covered by the additional prevented

planting coverage if -

(i) crop insurance policies were obtained for -

(I) the crop year the loss was experienced; and

(II) the crop year immediately preceding the year of the

prevented planting loss; and

(ii) the cause of the loss occurred -

(I) after the sales closing date for the crop in the crop

year immediately preceding the loss; and

(II) before the sales closing date for the crop in the

year in which the loss is experienced.

(i) Adoption of rates and coverages

(1) In general

The Corporation shall adopt, as soon as practicable, rates and

coverages that will improve the actuarial soundness of the

insurance operations of the Corporation for those crops that are

determined to be insured at rates that are not actuarially sound,

except that no rate may be increased by an amount of more than 20

percent over the comparable rate of the preceding crop year.

(2) Review of rating methodologies

To maximize participation in the Federal crop insurance program

and to ensure equity for producers, the Corporation shall

periodically review the methodologies employed for rating plans

of insurance under this chapter consistent with section

1507(c)(2) of this title.

(3) Analysis of rating and loss history

The Corporation shall analyze the rating and loss history of

approved policies and plans of insurance for agricultural

commodities by area.

(4) Premium adjustment

If the Corporation makes a determination that premium rates are

excessive for an agricultural commodity in an area relative to

the requirements of subsection (d)(2) of this section for that

area, then, for the 2002 crop year (and as necessary thereafter),

the Corporation shall make appropriate adjustments in the premium

rates for that area for that agricultural commodity.

(j) Claims for losses

(1) In general

Under rules prescribed by the Corporation, the Corporation may

provide for adjustment and payment of claims for losses. The

rules prescribed by the Corporation shall establish standards to

ensure that all claims for losses are adjusted, to the extent

practicable, in a uniform and timely manner.

(2) Denial of claims

(A) In general

Subject to subparagraph (B), if a claim for indemnity is

denied by the Corporation or an approved provider, an action on

the claim may be brought against the Corporation or Secretary

only in the United States district court for the district in

which the insured farm is located.

(B) Statute of limitations

A suit on the claim may be brought not later than 1 year

after the date on which final notice of denial of the claim is

provided to the claimant.

(3) Indemnification

The Corporation shall provide approved insurance providers with

indemnification, including costs and reasonable attorney fees

incurred by the approved insurance provider, due to errors or

omissions on the part of the Corporation.

(4) Marketing windows

The Corporation shall consider marketing windows in determining

whether it is feasible to require planting during a crop year.

(k) Reinsurance

(1) In general

Notwithstanding any other provision of this chapter, the

Corporation shall, to the maximum extent practicable, provide

reinsurance to insurers approved by the Corporation that insure

producers of any agricultural commodity under 1 or more plans

acceptable to the Corporation.

(2) Terms and conditions

The reinsurance shall be provided on such terms and conditions

as the Board may determine to be consistent with subsections (b)

and (c) of this section and sound reinsurance principles.

(3) Share of risk

The reinsurance agreements of the Corporation with the

reinsured companies shall require the reinsured companies to bear

a sufficient share of any potential loss under the agreement so

as to ensure that the reinsured company will sell and service

policies of insurance in a sound and prudent manner, taking into

consideration the financial condition of the reinsured companies

and the availability of private reinsurance.

(4) Rate

(A) In general

Except as provided in subparagraph (B), the rate established

by the Board to reimburse approved insurance providers and

agents for the administrative and operating costs of the

providers and agents shall not exceed -

(i) for the 1998 reinsurance year, 27 percent of the

premium used to define loss ratio; and

(ii) for each of the 1999 and subsequent reinsurance years,

24.5 percent of the premium used to define loss ratio.

(B) Proportional reductions

A policy of additional coverage that received a rate of

reimbursement for administrative and operating costs for the

1998 reinsurance year that is lower than the rate specified in

subparagraph (A)(i) shall receive a reduction in the rate of

reimbursement that is proportional to the reduction in the rate

of reimbursement between clauses (i) and (ii) of subparagraph

(A).

(C) Other reductions

Beginning with the 2002 reinsurance year, in the case of a

policy or plan of insurance approved by the Board that was not

reinsured during the 1998 reinsurance year but, had it been

reinsured, would have received a reduced rate of reimbursement

during the 1998 reinsurance year, the rate of reimbursement for

administrative and operating costs established for the policy

or plan of insurance shall take into account the factors used

to determine the rate of reimbursement for administrative and

operating costs during the 1998 reinsurance year, including the

expected difference in premium and actual administrative and

operating costs of the policy or plan of insurance relative to

an individual yield policy or plan of insurance and other

appropriate factors, as determined by the Corporation.

(5) Cost and regulatory reduction

Consistent with section 118 of the Federal Crop Insurance

Reform Act of 1994, and consistent with maintenance of program

integrity, prevention of fraud and abuse, the need for program

expansion, and improvement of quality of service to customers,

the Board shall alter program procedures and administrative

requirements in order to reduce the administrative and operating

costs of approved insurance providers and agents in an amount

that corresponds to any reduction in the reimbursement rate

required under paragraph (4) during the 5-year period beginning

on October 13, 1994.

(6) Agency discretion

The determination of whether the Corporation is achieving, or

has achieved, corresponding administrative cost savings shall not

be subject to administrative review, and is wholly committed to

agency discretion within the meaning of section 701(a)(2) of

title 5.

(7) Plan

The Corporation shall submit to Congress a plan outlining the

measures that will be used to achieve the reduction required

under paragraph (5). If the Corporation can identify additional

cost reduction measures, the Corporation shall describe the

measures in the plan.

(l) Optional coverages

The Corporation may offer specific risk protection programs,

including protection against prevented planting, wildlife

depredation, tree damage and disease, and insect infestation, under

such terms and conditions as the Board may determine, except that

no program may be undertaken if insurance for the specific risk

involved is generally available from private companies.

(m) Quality loss adjustment coverage

(1) Effect of coverage

If a policy or plan of insurance offered under this chapter

includes quality loss adjustment coverage, the coverage shall

provide for a reduction in the quantity of production of the

agricultural commodity considered produced during a crop year, or

a similar adjustment, as a result of the agricultural commodity

not meeting the quality standards established in the policy or

plan of insurance.

(2) Additional quality loss adjustment

(A) Producer option

Notwithstanding any other provision of law, in addition to

the quality loss adjustment coverage available under paragraph

(1), the Corporation shall offer producers the option of

purchasing quality loss adjustment coverage on a basis that is

smaller than a unit with respect to an agricultural commodity

that satisfies each of the following:

(i) The agricultural commodity is sold on an

identity-preserved basis.

(ii) All quality determinations are made solely by the

Federal agency designated to grade or classify the

agricultural commodity.

(iii) All quality determinations are made in accordance

with standards published by the Federal agency in the Federal

Register.

(iv) The discount schedules that reflect the reduction in

quality of the agricultural commodity are established by the

Secretary.

(B) Basis for adjustment

Under this paragraph, the Corporation shall set the quality

standards below which quality losses will be paid based on the

variability of the grade of the agricultural commodity from the

base quality for the agricultural commodity.

(3) Review of criteria and procedures

(A) Review

The Corporation shall contract with a qualified person to

review the quality loss adjustment procedures of the

Corporation so that the procedures more accurately reflect

local quality discounts that are applied to agricultural

commodities insured under this chapter.

(B) Procedures

Effective beginning not later than the 2004 reinsurance year,

based on the review, the Corporation shall make adjustments in

the procedures, taking into consideration the actuarial

soundness of the adjustment and the prevention of fraud, waste,

and abuse.

(4) Quality of agricultural commodities delivered to warehouse

operators

In administering this chapter, the Secretary shall accept, in

the same manner and under the same terms and conditions, evidence

of the quality of agricultural commodities delivered to -

(A) warehouse operators that are licensed under the United

States Warehouse Act (7 U.S.C. 241 et seq.);

(B) warehouse operators that -

(i) are licensed under State law; and

(ii) have entered into a storage agreement with the

Commodity Credit Corporation; and

(C) warehouse operators that -

(i) are not licensed under State law but are in compliance

with State law regarding warehouses; and

(ii) have entered into a commodity storage agreement with

the Commodity Credit Corporation.

(n) Limitation on multiple benefits for same loss

(1) In general

Except as provided in paragraph (2), if a producer who is

eligible to receive benefits under catastrophic risk protection

under subsection (b) of this section is also eligible to receive

assistance for the same loss under any other program administered

by the Secretary, the producer shall be required to elect whether

to receive benefits under this chapter or under the other

program, but not both. A producer who purchases additional

coverage under subsection (c) of this section may also receive

assistance for the same loss under other programs administered by

the Secretary, except that the amount received for the loss under

the additional coverage together with the amount received under

the other programs may not exceed the amount of the actual loss

of the producer.

(2) Exception

Paragraph (1) shall not apply to emergency loans under subtitle

C of the Consolidated Farm and Rural Development Act (7 U.S.C.

1961 et seq.).

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 508, 52 Stat. 74; June 22,

1938, ch. 563, 52 Stat. 835; June 21, 1941, ch. 214, Sec. 3-7, 10,

55 Stat. 255, 256; Dec. 23, 1944, ch. 713, Sec. 1-3, 58 Stat. 918,

919; Aug. 1, 1947, ch. 440, Sec. 1-3, 61 Stat. 718; Aug. 25, 1949,

ch. 512, Sec. 1-3, 63 Stat. 663; Aug. 13, 1953, ch. 431, 67 Stat.

575; Pub. L. 85-111, July 23, 1957, 71 Stat. 309; Pub. L. 86-131,

Aug. 4, 1959, 73 Stat. 278; Pub. L. 88-589, Sept. 12, 1964, 78

Stat. 933; Pub. L. 96-365, title I, Sec. 105, 106, 107(b), Sept.

26, 1980, 94 Stat. 1314, 1315, 1317; Pub. L. 100-387, title II,

Sec. 208(a), Aug. 11, 1988, 102 Stat. 941; Pub. L. 101-624, title

XXII, Sec. 2203-2205, Nov. 28, 1990, 104 Stat. 3955-3957; Pub. L.

102-237, title VI, Sec. 601(4), (5), Dec. 13, 1991, 105 Stat. 1878;

Pub. L. 103-66, title XIV, Sec. 1403(b)(1), (2), Aug. 10, 1993, 107

Stat. 333, 334; Pub. L. 103-354, title I, Sec. 106, Oct. 13, 1994,

108 Stat. 3183; Pub. L. 104-127, title I, Sec. 193(a)(1), (2), (c),

(d), (f), 195, Apr. 4, 1996, 110 Stat. 943-946; Pub. L. 105-185,

title V, Sec. 532, 534, June 23, 1998, 112 Stat. 581, 583; Pub. L.

105-277, div. A, Sec. 101(a) (title VIII, Sec. 803(a)), Oct. 21,

1998, 112 Stat. 2681, 2681-38; Pub. L. 106-113, div. B, Sec.

1000(a)(5) (title II, Sec. 205(a), 206), Nov. 29, 1999, 113 Stat.

1536, 1501A-294; Pub. L. 106-224, title I, Sec. 101-103(b)(1), (c),

(d), 104-107, 123, 124(a), 144-146, 161, 162, June 20, 2000, 114

Stat. 360-368, 378, 391, 392, 395; Pub. L. 107-171, title X, Sec.

10001-10003, May 13, 2002, 116 Stat. 486.)

-REFTEXT-

REFERENCES IN TEXT

The Department of Agriculture Reorganization Act of 1994,

referred to in subsec. (a)(3)(B)(ii)(I), is title II of Pub. L.

103-354, Oct. 13, 1994, 108 Stat. 3209, as amended. Subtitle H of

the Act is classified principally to subchapter VIII (Sec. 6991 et

seq.) of chapter 98 of this title. For complete classification of

this Act to the Code, see Tables.

The Agricultural Market Transition Act, referred to in subsec.

(b)(7)(A), is title I of Pub. L. 104-127, Apr. 4, 1996, 110 Stat.

896, which is classified principally to chapter 100 (Sec. 7201 et

seq.) of this title. For complete classification of this Act to

the Code, see References in Text note set out under section 7201 of

this title and Tables.

For the effective date of this paragraph, referred to in subsecs.

(b)(10)(B) and (g)(3)(C), as being Oct. 13, 1994, see Effective

Date of 1994 Amendment note below.

Section 7759 of this title, referred to in subsec. (g)(5)(A)(i),

was amended by Pub. L. 106-224, title IV, Sec. 438(a)(3), June 20,

2000, 114 Stat. 454, and, as amended, no longer contains provisions

defining the term ''plant pest''. See section 7702 of this title.

Section 118 of the Federal Crop Insurance Reform Act of 1994,

referred to in subsec. (k)(5), is section 118 of Pub. L. 103-354,

which is set out as a note under section 1506 of this title.

The United States Warehouse Act, referred to in subsec.

(m)(4)(A), is part C of act Aug. 11, 1916, ch. 313, 39 Stat. 486,

as amended, which is classified generally to chapter 10 (Sec. 241

et seq.) of this title. For complete classification of this Act to

the Code, see Short Title note set out under section 241 of this

title and Tables.

The Consolidated Farm and Rural Development Act, referred to in

subsec. (n)(2), is title III of Pub. L. 87-128, Aug. 8, 1961, 75

Stat. 307, as amended. Subtitle C of the Act is classified

generally to subchapter III (Sec. 1961 et seq.) of chapter 50 of

this title. For complete classification of this Act to the Code,

see Short Title note set out under section 1921 of this title and

Tables.

-MISC2-

AMENDMENTS

2002 - Subsec. (a)(2). Pub. L. 107-171, Sec. 10001, substituted

'', potatoes, and sweet potatoes'' for ''and potatoes''.

Subsec. (e)(4). Pub. L. 107-171, Sec. 10002, substituted

''Prohibition'' for ''Temporary prohibition'' in heading and ''and

subsequent reinsurance years'' for ''through 2005 reinsurance

years'' in text.

Subsec. (m)(3). Pub. L. 107-171, Sec. 10003(1), designated first

sentence of par. (3) as subpar. (A) and inserted heading and

designated second sentence of par. (3) as subpar. (B), inserted

heading, and substituted ''Effective beginning not later than the

2004 reinsurance year, based on'' for ''Based on'' in text.

Subsec. (m)(4). Pub. L. 107-171, Sec. 10003(2), added par. (4).

2000 - Subsec. (a)(3). Pub. L. 106-224, Sec. 123, added par. (3)

and struck out heading and text of former par. (3). Text read as

follows: ''Insurance provided under this subsection shall not cover

losses due to -

''(A) the neglect or malfeasance of the producer;

''(B) the failure of the producer to reseed to the same crop in

such areas and under such circumstances as it is customary to

reseed; or

''(C) the failure of the producer to follow good farming

practices (as determined by the Secretary).''

Subsec. (a)(3)(C). Pub. L. 106-224, Sec. 161, added subpar. (C).

Subsec. (a)(5). Pub. L. 106-224, Sec. 144, designated existing

provisions as subpar. (A) and inserted heading, redesignated former

subpars. (A) and (B) as cls. (i) and (ii), respectively, and

realigned their margins, and added subpar. (B).

Subsec. (a)(7). Pub. L. 106-224, Sec. 145, added par. (7).

Subsec. (a)(8). Pub. L. 106-224, Sec. 162, added par. (8).

Subsec. (b)(3). Pub. L. 106-224, Sec. 103(a), added par. (3) and

struck out heading and text of former par. (3). Text read as

follows: ''A producer shall have the option of basing the

catastrophic coverage of the producer on an individual yield and

loss basis or on an area yield and loss basis, if both options are

offered by the Corporation.''

Subsec. (b)(5)(A). Pub. L. 106-224, Sec. 103(b)(1)(A),

substituted ''$100'' for ''$50''.

Subsec. (b)(5)(B). Pub. L. 106-224, Sec. 103(b)(1)(B), (c), added

subpar. (B) and struck out heading and text of former subpar. (B).

Text read as follows: ''In addition to the amount required under

subparagraph (A), the producer shall pay a $10 fee for each amount

determined under subparagraph (A).''

Subsec. (b)(5)(C). Pub. L. 106-224, Sec. 103(b)(1)(C),

substituted ''administrative fee required by this paragraph'' for

''amounts required under subparagraphs (A) and (B)''.

Subsec. (b)(11). Pub. L. 106-224, Sec. 103(d), substituted ''8

percent'' for ''11 percent''.

Subsec. (c)(5). Pub. L. 106-224, Sec. 101(a), added par. (5) and

struck out heading and text of former par. (5). Text read as

follows: ''The Corporation shall establish a price level for each

commodity on which insurance is offered that -

''(A) shall not be less than the projected market price for the

commodity (as determined by the Corporation); or

''(B) at the discretion of the Corporation, may be based on the

actual market price at the time of harvest (as determined by the

Corporation).''

Subsec. (c)(10). Pub. L. 106-224, Sec. 104, added par. (10) and

struck out former par. (10), which required administrative fee

where producer elected to purchase additional coverage for crop at

level that was less than 65 percent of recorded or appraised

average yield indemnified at 100 percent of expected market price,

or equivalent coverage, and provided for exception to fee if

producer elected to purchase additional coverage for crop equal to

65 percent or more of recorded or appraised average yield

indemnified at 100 percent of expected market price, or equivalent

coverage, additional fee if producer elected to purchase additional

coverage for crop equal to or exceeding 65 percent of recorded or

appraised average yield and 100 percent of expected market price or

equivalent coverage, and for deposit of fees.

Subsec. (d)(2)(B), (C). Pub. L. 106-224, Sec. 101(b)(1), added

subpar. (B) and struck out former subpars. (B) and (C), which

described premium amounts in the case of additional coverage below,

equal to, or greater than 65 percent of the recorded or appraised

average yield indemnified at 100 percent of the expected market

price, or an equivalent coverage.

Subsec. (d)(3). Pub. L. 106-224, Sec. 101(b)(2), added par. (3).

Subsec. (e)(2). Pub. L. 106-224, Sec. 101(c)(1), substituted

''Subject to paragraph (4), the amount'' for ''The amount'' in

introductory provisions.

Subsec. (e)(2)(B) to (G). Pub. L. 106-224, Sec. 101(c)(2), added

subpars. (B) to (G) and struck out former subpars. (B) and (C),

which set forth amount of premium to be paid by Corporation in the

case of coverage below, equal to, or greater than 65 percent of the

recorded or appraised average yield indemnified at 100 percent of

the expected market price, or an equivalent coverage.

Subsec. (e)(4). Pub. L. 106-224, Sec. 101(d), added par. (4) and

struck out former par. (4), which authorized Corporation to allow

approved providers to offer insurance plan to producers that would

combine both individual and area yield coverage at a premium rate

determined under certain conditions.

Subsec. (e)(5). Pub. L. 106-224, Sec. 101(e), added par. (5).

Subsec. (f)(3)(A). Pub. L. 106-224, Sec. 124(a), added subpar.

(A) and struck out former subpar. (A) which read as follows:

''provide, to the extent required by the Corporation, records

acceptable to the Corporation of historical acreage and production

of the crops for which the insurance is sought or accept a yield

determined by the Corporation; and''.

Subsec. (g)(2)(B). Pub. L. 106-224, Sec. 105(a), designated

existing provisions of subpar. (B) as cl. (i) and added cl. (ii).

Subsec. (g)(2)(D). Pub. L. 106-224, Sec. 101(f), struck out ''(as

provided in subsection (e)(4) of this section)'' after ''combined

coverage''.

Subsec. (g)(4), (5). Pub. L. 106-224, Sec. 105(b), added pars.

(4) and (5).

Subsec. (h)(1). Pub. L. 106-224, Sec. 146(a), inserted

''(including an approved insurance provider, a college or

university, a cooperative or trade association, or any other

person)'' after ''a person'' in introductory provisions.

Subsec. (h)(2). Pub. L. 106-224, Sec. 102(a)(1), struck out at

end ''In the case of such a policy, the payment by the Corporation

of a portion of the premium of the policy may not exceed the amount

that would otherwise be authorized under subsection (e) of this

section.''

Subsec. (h)(3). Pub. L. 106-224, Sec. 146(b), inserted ''by

approved insurance providers'' after ''for sale'' in first

sentence.

Subsec. (h)(4)(A). Pub. L. 106-224, Sec. 146(c)(1), added subpar.

(A) and struck out former subpar. (A) which read as follows: ''A

proposal submitted to the Board under this subsection shall be

considered as confidential commercial or financial information for

purposes of section 552(b)(4) of title 5 until approved by the

Board. A proposal disapproved by the Board shall remain

confidential commercial or financial information.''

Subsec. (h)(4)(B). Pub. L. 106-224, Sec. 146(c)(2), inserted

subpar. heading.

Subsec. (h)(4)(C), (D). Pub. L. 106-224, Sec. 146(c)(3), added

subpars. (C) and (D) and struck out former subpars. (C) and (D),

which required notice of intent to disapprove, provided that

modification would be considered an original application, and

directed that specific guidelines were to prescribe timely

submission and consideration of proposals.

Subsec. (h)(5). Pub. L. 106-224, Sec. 102(a)(2), added par. (5)

and struck out heading and text of former par. (5). Text read as

follows: ''Any policy, provision of a policy, or rate approved

under this subsection shall be published as a notice in the Federal

Register and made available to all persons contracting with or

reinsured by the Corporation under the terms and conditions of the

contract between the Corporation and the person originally

submitting the policy or other material.''

Subsec. (h)(6) to (10). Pub. L. 106-224, Sec. 146(d),

redesignated par. (7) as (6) and struck out former pars. (6) which

related to pilot cost of production risk protection plan, (8) which

related to pilot program of assigned yields for new producers, (9)

which related to revenue insurance pilot program, and (10) which

related to time limits for response to submission of new policies.

Subsec. (i). Pub. L. 106-224, Sec. 106, designated existing

provisions as par. (1), inserted heading, and added pars. (2) to

(4).

Subsec. (k)(4)(C). Pub. L. 106-224, Sec. 102(b), added subpar.

(C).

Subsec. (m). Pub. L. 106-224, Sec. 107, added subsec. (m) and

struck out former subsec. (m), which authorized research, surveys,

pilot programs, and investigations relating to crop insurance and

agriculture-related risks and losses and required evaluation of

pilot programs and submission of reports, including recommendations

with respect to implementation of programs on a national basis.

1999 - Subsec. (f)(2). Pub. L. 106-113, Sec. 1000(a)(5) (title

II, Sec. 206), designated existing provisions as subpar. (A),

inserted heading, struck out ''Beginning with the 1995 crop year,

the Corporation shall establish, for an insurance policy for each

insurable crop that is planted in the spring, a sales closing date

that is 30 days earlier than the corresponding sales closing date

that was established for the 1994 crop year.'' after ''price and

production adjustment programs of the Department.'', and added

subpars. (B) and (C).

Subsec. (h)(9)(A). Pub. L. 106-113, Sec. 1000(a)(5) (title II,

Sec. 205(a)), substituted ''1997 through 2001'' for ''1997, 1998,

1999, and 2000''.

1998 - Subsec. (b)(5). Pub. L. 105-185, Sec. 532(a), added par.

(5) and struck out heading and text of former par. (5) which, in

subpar. (A) required payment of $50 fee per crop per county up to a

maximum of $200 per producer per county and $600 per producer for

all counties, in subpar. (B) directed crediting of fees up to $100

collected by USDA offices to appropriations account, retention of

fees up to $100 collected by approved insurance providers, and

deposit of fees in excess of $100 in crop insurance fund, and in

subpar. (C) waived fee for limited resource farmers as defined by

Corporation.

Subsec. (b)(11). Pub. L. 105-185, Sec. 532(d), added par. (11).

Subsec. (c)(10)(A). Pub. L. 105-185, Sec. 532(b)(1), added

subpar. (A) and struck out heading and text of former subpar. (A).

Text read as follows: ''Except as otherwise provided in this

paragraph, if a producer elects to purchase additional coverage for

a crop at a level that is less than 65 percent of the recorded or

appraised average yield indemnified at 100 percent of the expected

market price, or an equivalent coverage, the producer shall pay an

administrative fee for the additional coverage. Subsection (b)(5)

of this section shall apply in determining the amount and use of

the administrative fee or in determining whether to waive the

administrative fee.''

Subsec. (c)(10)(C). Pub. L. 105-185, Sec. 532(b)(2), substituted

''$20'' for ''$10'' in first sentence.

Subsec. (h)(10). Pub. L. 105-185, Sec. 534, added par. (10).

Subsec. (k)(4). Pub. L. 105-185, Sec. 532(c), added par. (4) and

struck out heading and text of former par. (4). Text read as

follows: ''The rate established by the Board to reimburse approved

insurance providers and agents for the administrative and operating

costs of the providers and agents shall not exceed -

''(A) for the 1997 reinsurance year, 29 percent of the premium

used to define loss ratio;

''(B) for the 1998 reinsurance year, 28 percent of the premium

used to define loss ratio; and

''(C) for the 1999 reinsurance year, 27.5 percent of the

premium used to define loss ratio.''

Subsec. (n). Pub. L. 105-277 designated existing provisions as

par. (1), inserted heading, substituted ''Except as provided in

paragraph (2), if a producer'' for ''If a producer'', and added

par. (2).

1996 - Subsec. (a)(6)(D). Pub. L. 104-127, Sec. 193(c), added

subpar. (D).

Subsec. (b)(4)(C). Pub. L. 104-127, Sec. 193(a)(1), added subpar.

(C).

Subsec. (b)(7)(A). Pub. L. 104-127, Sec. 193(a)(2), added subpar.

(A) and struck out heading and text of former subpar. (A). Prior to

amendment, text read as follows: ''To be eligible for any price

support or production adjustment program, the conservation reserve

program, or any benefit described in section 2008f of this title,

the producer must obtain at least the catastrophic level of

insurance for each crop of economic significance grown on each farm

in the county in which the producer has an interest, if insurance

is available in the county for the crop.''

Subsec. (h)(9). Pub. L. 104-127, Sec. 195, added par. (9).

Subsec. (j)(4). Pub. L. 104-127, Sec. 193(d), added par. (4).

Subsec. (n). Pub. L. 104-127, Sec. 193(f), added subsec. (n).

1994 - Pub. L. 103-354 amended section generally, substituting

present provisions for former provisions which related to: in

subsec. (a), authority to offer insurance; in subsec. (b),

submission of policies and materials to Board; in subsec. (c),

actuarial soundness; in subsec. (d), adoption of rates and

coverages; in subsec. (e), premiums; in subsec. (f), claims for

losses; in subsec. (g), special rule for cotton; in subsec. (h),

reinsurance; in subsec. (i), application to other areas; in subsec.

(j), optional coverages; in subsec. (k), research; in subsec. (l),

crop insurance for dry edible beans; in subsec. (m), information

collection on crop insurance; and in subsec. (n), area yield plan.

1993 - Subsec. (h). Pub. L. 103-66, Sec. 1403(b)(1), substituted

fifth sentence for former fifth sentence which read as follows:

''The Corporation shall also pay operating and administrative costs

to insurers of policies on which the Corporation provides

reinsurance to the same extent that such costs are covered by the

Corporation on the Corporation's policies of insurance.''

Subsec. (n). Pub. L. 103-66, Sec. 1403(b)(2), added subsec. (n).

1991 - Subsec. (a). Pub. L. 102-237, Sec. 601(4), struck out par.

(1) designation.

Subsecs. (k) to (n). Pub. L. 102-237, Sec. 601(5), redesignated

subsecs. (l) to (n) as (k) to (m), respectively.

1990 - Pub. L. 101-624, Sec. 2204(b)(1), inserted section

catchline and struck out ''To carry out the purposes of this

chapter the Corporation is authorized and empowered - '' before

subsec. (a).

Subsec. (a). Pub. L. 101-624, Sec. 2205(1), inserted heading,

substituted ''the Corporation may insure'' for ''to insure'' in

first sentence, and inserted provisions relating to amount of

insurance to be provided in cases where Agricultural Stabilization

and Conservation Service has established adjusted yields, and

provisions relating to establishment of a price level for each

commodity beginning with the 1992 crop year.

Subsecs. (b) to (d). Pub. L. 101-624, Sec. 2204(a)(1), (2), added

subsecs. (b) to (d) and redesignated subsecs. (b) to (d) as (e) to

(g), respectively.

Subsec. (e). Pub. L. 101-624, Sec. 2204(a)(1), (b)(2),

redesignated subsec. (b) as (e), inserted heading, and substituted

''The Corporation may fix'' for ''To fix'' in par. (1). Former

subsec. (e) redesignated (h).

Subsec. (f). Pub. L. 101-624, Sec. 2204(a)(1), redesignated

subsec. (c) as (f). Former subsec. (f) redesignated (i).

Pub. L. 101-624, Sec. 2203(a), inserted heading, substituted

''The Corporation may adjust and pay claims for losses as provided

under subsection (a) of this section'' for ''To adjust and pay

claims for losses'', and inserted after first sentence ''The rules

prescribed by the Board shall establish standards to ensure that

all claims for losses are adjusted to the extent practicable in a

uniform and timely manner.''

Subsec. (g). Pub. L. 101-624, Sec. 2204(a)(1), (b)(3),

redesignated subsec. (d) as (g), inserted heading, and substituted

''the Corporation may include'' for ''to include''. Former subsec.

(g) redesignated (j).

Subsec. (h). Pub. L. 101-624, Sec. 2204(a)(1), redesignated

subsec. (e) as (h). Former subsec. (h) redesignated (k).

Pub. L. 101-624, Sec. 2203(b), inserted heading, substituted

''The Corporation is directed'' for ''And directed'', and inserted

sentence at end relating to revision of reinsurance agreements

beginning with the 1992 reinsurance year.

Subsec. (i). Pub. L. 101-624, Sec. 2204(a)(1), (b)(4),

redesignated subsec. (f) as (i), inserted heading, and substituted

''The Corporation may provide'' for ''To provide''. Former subsec.

(i) redesignated (l).

Subsec. (j). Pub. L. 101-624, Sec. 2204(a)(1), (b)(5),

redesignated subsec. (g) as (j), inserted heading, and substituted

''The Corporation may offer'' for ''To offer''. Former subsec. (j)

redesignated (m).

Subsec. (k). Pub. L. 101-624, Sec. 2205(2), struck out subsec.

(k) which set out a special rule for calculating premiums and

indemnities, with respect to insuring timber and forest yields.

Pub. L. 101-624, Sec. 2204(a)(1), (b)(6), redesignated subsec.

(h) as (k), inserted heading, and substituted ''The Corporation may

include'' for ''To include''.

Subsec. (l). Pub. L. 101-624, Sec. 2204(a)(1), (b)(7),

redesignated subsec. (i) as (l), inserted heading, substituted

''The Corporation may conduct'' for ''To conduct'', and struck out

second and third sentences which read as follows: ''Beginning in

the 1981 crop year and ending after the 1985 crop year, the

Corporation shall also conduct a pilot program of individual risk

underwriting of crop insurance in not less than twenty-five

counties. Under this pilot program, to the extent that appropriate

yield data are available, the Corporation shall make available to

producers in such counties crop insurance under this chapter based

on personalized rates and with guarantees determined from the

producer's actual yield history.''

Subsec. (m). Pub. L. 101-624, Sec. 2204(b)(8), added subsec. (m)

and struck out former subsec. (m) which read as follows: ''To

accumulate, prior to the 1989 crop year, sufficient actuarial data

to enable the Corporation to provide crop insurance that meets the

differentiated needs of producers of different types of dry edible

beans. Commencing with the 1989 crop year, the Corporation shall

make such crop insurance available to producers.''

Pub. L. 101-624, Sec. 2204(a)(1), redesignated subsec. (j) as

(m).

Subsec. (n). Pub. L. 101-624, Sec. 2204(a)(3), added subsec. (n).

1988 - Subsec. (j). Pub. L. 100-387 added subsec. (j).

1980 - Subsec. (a). Pub. L. 96-365, Sec. 105, authorized

Corporation, if sufficient actuarial data is available, to insure

producers of any agricultural commodity grown in the United States

under any plan of insurance determined to be adapted to the

commodity involved; defined ''field'' in the case of aquacultural

species to mean the environment in which the commodity is produced;

in revising percentage limitations for crop insurance coverage,

prescribed 75 per centum protection for recorded or appraised

average yield (previously protected up to such percentage), offered

producers lesser levels of coverage including 50 per centum of

recorded or appraised average yield as adjusted, barred protection

exceeding 75 per centum, offered price election approximating (but

not less than 90 per centum of) projected market price for

commodity involved, and struck out requirement for downward

adjustment of minimum percentage in yield which may be insured to

reflect investment in crop; and struck out limitations on Federal

crop insurance program which: limited crop insurance to not more

than seven agricultural commodities in 1948 and to not more than

three additional commodities yearly thereafter, beginning with 1954

crop authorized yearly expansion of crop insurance program to not

more than 150 counties in addition to counties offered insurance

the previous year, limited reinsurance for private insurance

companies to 20 counties, and required counties selected by the

Board for crop insurance to be representative of areas where the

commodity involved normally was produced; and struck out general

reinsurance provision, covered in subsec. (e) of this section.

Subsec. (b). Pub. L. 96-365, Sec. 106(1), designated existing

provisions as par. (1), struck out ''in the agricultural commodity

or in cash,'' after ''premiums for insurance'' and proviso from

first sentence authorizing establishment of premiums on the basis

of the parity or comparable price for the commodity as determined

and publish by Secretary of Agriculture, or on the basis of an

average market price designated by the Board and second sentence

providing for collection of premiums at such time or times, or for

securing in such manner, as the Board may determine, which is

covered in par. (4), required the rates to be actuarially

sufficient, added pars. (2) and (3), incorporated existing

provision in par. (4), and added pars. (5) and (6).

Subsec. (c). Pub. L. 96-365, Sec. 106(2), struck out ''in the

agricultural commodity or in cash,'' after ''claims for losses''

and provisions respecting: determination of indemnities on same

price basis as premiums were determined for the crop with respect

to which the indemnities were paid; requirement that the

Corporation post annually for each county at the county courthouse

a list of indemnities paid for losses on farms in the county;

action on claims in any court of the State having general

jurisdiction, sitting in the county where the insured farm was

located; and jurisdiction of district courts without regard to

amount in controversy.

Subsec. (d). Pub. L. 96-365, Sec. 106(3), redesignated subsec.

(e) as (d) and struck out prior subsec. (d) authorizing Corporation

to purchase, handle, store, insure, provide storage facilities for,

and sell agricultural commodities.

Subsec. (e). Pub. L. 96-365, Sec. 106(4), added subsec. (e).

Former subsec. (e) redesignated (d).

Subsec. (f). Pub. L. 96-365, Sec. 106(4), substituted provisions

for insurance and reinsurance in the territories and possessions

for prior provision for reinsurance in Puerto Rico when not

available from recognized private sources.

Subsecs. (g), (h). Pub. L. 96-365, Sec. 106(4), added subsecs.

(g) and (h).

Subsec. (i). Pub. L. 96-365, Sec. 107(b), added subsec. (i).

1964 - Subsec. (a). Pub. L. 88-589 increased from 100 to 150 the

number of counties into which the Federal crop insurance program

may be extended.

1959 - Subsec. (a). Pub. L. 86-131 struck out provision

prohibiting Federal crop insurance in a county unless two hundred

farms or one third of the farms normally producing the commodity

apply for such insurance, excluding farms refused insurance on the

basis of risk involved.

1957 - Subsec. (f). Pub. L. 85-111 added subsec. (f).

1953 - Subsec. (a). Act Aug. 13, 1953, authorized extension of

Federal crop insurance program into an additional 100 counties,

struck out commodity formula basis on which this expansion may take

place, and provided an exception to the strict county limitation by

providing that producers on farms situated in a local producing

area bordering on a county with a crop insurance program may be

included in that county's program.

1949 - Subsec. (a). Act Aug. 25, 1949, Sec. 1, provided for an

annual increase in number of counties in which insurance now

offered by Corporation can be issued.

Subsec. (b). Act Aug. 25, 1949, Sec. 2, struck out provision

under which Corporation's administrative expenses are restricted,

after the crop year 1949, to a sum equivalent to 25 percent of the

premiums collected in the preceding year.

Subsec. (c). Act Aug. 25, 1949, Sec. 3, struck out provision

which required prorating of losses beginning with crop year 1950.

1947 - Subsec. (a). Act Aug. 1, 1947, Sec. 1, amended subsec. (a)

generally, and among other changes, provided for crop insurance,

commencing with crops planted for harvest in 1948, made provision

for reinsurance, enumerated specific crops insurable in 1948,

provided for additional crops in subsequent years, limited number

of counties in which certain crops were insurable, increased

required number of applications in any one county from fifty to two

hundred, and authorized Board to refuse insurance in any county

where agricultural commodity to be insured constitutes an

unimportant part of total agricultural income.

Subsec. (b). Act Aug. 1, 1947, Sec. 2, inserted proviso relating

to basis for premiums.

Subsec. (c). Act Aug. 1, 1947, Sec. 3, inserted first proviso

relating to determination of price basis for indemnities.

1944 - Subsec. (a). Act Dec. 23, 1944, Sec. 1, amended subsec.

(a) generally to provide insurance against loss not only for wheat

and cotton crops but also for flax, corn, oats, etc.

Subsec. (b). Act Dec. 23, 1944, Sec. 2, provided for the

establishment of such rates as would cover crop losses and build up

a reasonable reserve, and inserted proviso.

Subsec. (c). Act Dec. 23, 1944, Sec. 3, inserted first proviso,

and inserted ''and received'' after ''mailed to'' in last proviso.

1941 - Subsec. (a). Act June 21, 1941, Sec. 3-5, struck out comma

after ''1939'' and inserted ''and with the cotton crop planted for

harvest in 1942'', and substituted ''producers of the agricultural

commodity against loss in yields of the agricultural commodity''

for ''producers of wheat against loss in yields of wheat'' in the

first sentence, and ''the agricultural commodity'' for ''wheat'' in

the third sentence, respectively.

Subsecs. (b), (c). Act June 21, 1941, Sec. 6, substituted ''the

agricultural commodity'' for ''wheat'' wherever appearing.

Subsec. (d). Act June 21, 1941, Sec. 6, 10, substituted ''the

agricultural commodity'' for ''wheat'' wherever appearing, and

inserted second sentence.

Subsec. (e). Act June 21, 1941, Sec. 7, added subsec. (e).

1938 - Subsec. (a). Act June 22, 1938, inserted second proviso in

first sentence.

EFFECTIVE DATE OF 2000 AMENDMENT

Amendment by sections 101(a)-(c), 102(a), 103(a), (b)(1), (c),

104, 105(b), and 162 of Pub. L. 106-224 applicable beginning with

the 2001 crop of an agricultural commodity, amendment by sections

101(d), 102(b), and 103(d) of Pub. L. 106-224 applicable beginning

with the 2001 reinsurance year, amendment by sections 101(e), (f),

105(a), 106, 107, 123, 124(a), 144, 145, and 161 of Pub. L. 106-224

effective June 20, 2000, and amendment by section 146 of Pub. L.

106-224 effective Oct. 1, 2000, see section 171 of Pub. L. 106-224,

set out as a note under section 1501 of this title.

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by Pub. L. 105-185 effective July 1, 1998, see section

537 of Pub. L. 105-185, set out as a note under section 1506 of

this title.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

EFFECTIVE DATE OF 1993 AMENDMENT

Amendment by Pub. L. 103-66 effective Oct. 1, 1993, see section

1403(c) of Pub. L. 103-66, set out as a note under section 1506 of

this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Section 105 of Pub. L. 96-365 provided that the amendment made by

that section is effective with respect to 1981 and subsequent

crops.

Section 106 of Pub. L. 96-365 provided that the amendment made by

that section is effective with respect to 1981 and subsequent

crops.

Amendment by section 107(b) of Pub. L. 96-365 effective Sept. 26,

1980, see section 112 of Pub. L. 96-365, set out as a note under

section 1504 of this title.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-MISC5-

EXPANSION OF CROP INSURANCE PILOTS

Pub. L. 106-113, div. B, Sec. 1000(a)(5) (title II, Sec.

205(b)), Nov. 29, 1999, 113 Stat. 1536, 1501A-294, provided that:

''In the case of any pilot program offered under the Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) that was approved by the

Board of Directors of the Federal Crop Insurance Corporation on or

before September 30, 1999, the pilot program may be offered on a

regional, whole State, or national basis for the 2000 and 2001 crop

years notwithstanding section 553 of title 5, United States Code.''

LIMITATION ON FEE FOR CATASTROPHIC RISK PROTECTION

Pub. L. 105-277, div. A, Sec. 101(a) (title VII, Sec. 748), Oct.

21, 1998, 112 Stat. 2681, 2681-32, as amended by Pub. L. 106-224,

title I, Sec. 103(b)(2), June 20, 2000, 114 Stat. 364, provided

that: ''Notwithstanding the provisions of section 508(b)(5)(A) of

the Federal Crop Insurance Act (7 U.S.C. 1508(b)(5)(A)), for the

1999 reinsurance and subsequent reinsurance years, no producer

shall pay more than $100 per crop per county as an administrative

fee for catastrophic risk protection under section 508(b)(5)(A) of

the Act.''

SPECIAL RULE FOR 1996 CROP YEAR REGARDING CATASTROPHIC RISK

PROTECTION INSURANCE

Section 193(a)(3) of Pub. L. 104-127 provided that:

''(A) Effective period. - This paragraph shall apply only to the

1996 crop year.

''(B) Availability. - During a period of not less than 2 weeks,

but not more than 4 weeks, beginning on the date of enactment of

this title (Apr. 4, 1996), the Secretary shall provide producers

with an opportunity to obtain catastrophic risk protection

insurance under section 508(b) of the Federal Crop Insurance Act (7

U.S.C. 1508(b)) for a spring-planted crop, and limited additional

coverage for malting barley under the Malting Barley Price and

Quality Endorsement. The Federal Crop Insurance Corporation may

attach such limitations and restrictions on obtaining insurance

during this period as the Corporation considers necessary to

maintain the actuarial soundness of the crop insurance program.

''(C) Attachment. - Insurance coverage under any policy obtained

under this paragraph during the extended sales period shall not

attach until 10 days after the application.

''(D) Cancellation. - During the extended period, a producer may

cancel a catastrophic risk protection policy if -

''(i) the policy is a continuation of a policy that was

obtained for a previous crop year; and

''(ii) the cancellation request is made before the acreage

reporting date for the policy for the 1996 crop year.''

CROP INSURANCE PILOT PROGRAM

Section 193(b) of Pub. L. 104-127 provided that:

''(1) Coverage. - The Secretary of Agriculture shall develop and

administer a pilot project for crop insurance coverage that

indemnifies crop losses due to a natural disaster such as insect

infestation or disease.

''(2) Actuarial soundness. - A pilot project under this paragraph

shall be actuarially sound, as determined by the Secretary and

administered at no net cost.

''(3) Duration. - A pilot project under this paragraph shall be

of two years' duration.''

PREVENTED PLANTING

Section 116 of Pub. L. 103-354 provided that:

''(a) In General. - Effective for the 1994 crop year, a producer

described in subsection (b) shall receive compensation under the

prevented planting coverage policy provision described in

subsection (b)(1) by -

''(1) obtaining from the Secretary of Agriculture the

applicable amount that is payable under the conserving use

program described in subsection (b)(4); and

''(2) obtaining from the Federal Crop Insurance Corporation the

amount that is equal to the difference between -

''(A) the amount that is payable under the conserving use

program; and

''(B) the amount that is payable under the prevented planting

coverage policy.

''(b) Eligible Producers. - Subsection (a) shall apply to a

producer who -

''(1) purchased a prevented planting policy for the 1994 crop

year from the Federal Crop Insurance Corporation prior to the

spring sales closing date for the 1994 crop year;

''(2) is unable to plant a crop due to major, widespread

flooding in the Midwest, or excessive ground moisture, that

occurred prior to the spring sales closing date for the 1994 crop

year;

''(3) had a reasonable expectation of planting a crop on the

prevented planting acreage for the 1994 crop year; and

''(4) participates in a conserving use program established for

the 1994 crop of wheat, feed grains, upland cotton, or rice

established under section 107B(c)(1)(E), 105B(c)(1)(E),

103B(c)(1)(D), or 101B(c)(1)(D), respectively, of the

Agricultural Act of 1949 ((former) 7 U.S.C. 1445b-3a(c)(1)(E),

1444f(c)(1)(E), 1444-2(c)(1)(D), or 1441-2(c)(1)(D)).

''(c) Oilseed Prevented Planting Payments. -

''(1) In general. - Effective for the 1994 crop year, a

producer of a crop of oilseeds (as defined in section 205(a) of

the Agricultural Act of 1949 ((former) 7 U.S.C. 1446f(a))) shall

receive a prevented planting payment for the crop if the

requirements of paragraphs (1), (2), and (3) of subsection (b)

are satisfied.

''(2) Source of payment. - The total amount of payments

required under this subsection shall be made by the Federal Crop

Insurance Corporation.

''(d) Payment. - A payment under this section may not be made

before October 1, 1994.''

REPORT ON IMPROVING DISSEMINATION OF CROP INSURANCE INFORMATION

Section 117 of Pub. L. 103-354 provided that: ''Not later than

180 days after the date of enactment of this Act (Oct. 13, 1994)

and at the end of each of the 2 1-year periods thereafter, the

Federal Crop Insurance Corporation shall submit a report to

Congress containing a plan to implement a sound program for

producer education regarding the crop insurance program and for the

dissemination of crop insurance information to producers, as

required by section 508(a)(5) of the Federal Crop Insurance Act (7

U.S.C. 1508(a)(5)) (as amended by section 106).''

FEDERAL CROP INSURANCE COMMISSION

Pub. L. 100-546, Oct. 28, 1988, 102 Stat. 2730, provided for

establishment, membership, compensation, etc., of Commission for

the Improvement of the Federal Crop Insurance Program, directed

Commission to study and determine why participation in program had

not reached levels anticipated when Federal Crop Insurance Act of

1980 was enacted, to identify States and commodities to which lack

of participation in program is most serious, and to prepare

findings and recommendations setting forth means by which

participation in program could be increased and natural protection

for producers of agricultural commodities could be improved,

required Commission to submit an interim report to Congressional

committees and Secretary of Agriculture, not later than Apr. 1,

1989, containing findings and recommendations for immediate

administrative improvement in program, aimed at improving program

in 1990 sales year, and a final report, not later than July 1,

1989, to include Commission's findings and recommendation and a

status report on improvement of program, authorized Commission to

continue to monitor program and to submit monthly reports beginning

July 1, 1989, and ending Dec. 31, 1990, and terminated Commission

on Dec. 31, 1990.

LOSS ADJUSTMENT OBLIGATIONS

Pub. L. 100-203, title I, Sec. 1507, Dec. 22, 1987, 101 Stat.

1330-29, provided that: ''It is the sense of Congress that, in

carrying out the Federal Crop Insurance Act (7 U.S.C. 1501 et

seq.), the Federal Crop Insurance Corporation -

''(1) should not be required to assume 100 percent of all loss

adjustments in the Federal crop insurance program; and

''(2) should assume and perform the loss adjustment obligations

of a reinsured company if the Corporation determines that such

company's loss adjustment performance and practices are not

carried out in accordance with the applicable reinsurance

agreement.''

NOTICE TO PRODUCERS OF RIGHT TO ELECT SUBSIDIZED CROP INSURANCE OR

DISASTER PAYMENTS ON 1981 CROPS

Section 202 of Pub. L. 96-365 provided that: ''The Secretary of

Agriculture, after consultation with the Board of Directors of the

Federal Crop Insurance Corporation, shall, at least sixty days

prior to the beginning of the planting of the 1981 crops of wheat,

feed grains, upland cotton, and rice, or thirty days after the date

of enactment of this Act (Sept. 26, 1980), whichever is the later,

notify producers of those commodities of their right to elect, with

respect to the 1981 crop, between (1) declaring the farm acreage of

the respective commodity eligible for disaster payments under the

Agricultural Act of 1949 (7 U.S.C. 1421 et seq.), or (2) covering

such farm acreage with crop insurance, part of the premium for

which is paid by the Federal Crop Insurance Corporation under the

provisions of section 508(b)(3) or 508(e) of the Federal Crop

Insurance Act (subsec. (b)(3) or (e) of this section). Such notice

shall include a statement of the percent of crop insurance premium

that will be paid by the Corporation.''

STUDY OF ALTERNATIVE ALL-RISK, ALL-CROP INSURANCE PROGRAMS

Pub. L. 95-181, Sec. 2, Nov. 15, 1977, 91 Stat. 1373, provided

that: ''The Secretary of Agriculture shall undertake an immediate

study of alternative programs which could be established for an

all-risk, all-crop insurance to help provide protection to those

suffering crop losses in floods, droughts, and other natural

disasters, including alternative methods of administration, Federal

assistance, reinsurance, rate setting and private insurance

industry involvement, as well as variations on the existing crop

insurance program, and such other matters as he determines are

relevant, and shall report his findings and recommendations to the

President for transmission to the Congress by March 1, 1978. The

Secretary shall consult with the Secretary of Housing and Urban

Development on behalf of the Federal Insurance Administration; the

Secretary of Treasury and representatives of the private insurance

industry in the course of the study and shall identify the views of

each in forwarding his findings and recommendations to the

President. Such sums, not exceeding $200,000, as are appropriated

for fiscal year 1978 under section 504 of the Federal Crop

Insurance Act, as amended (section 1504 of this title), may be

utilized to conduct such a study.''

VALIDITY AND TERMINATION OF PRIOR INSURANCE CONTRACTS

Section 5 of act Aug. 1, 1947, provided: ''Nothing in this Act

(amending sections 1502, 1505 (a to d), 1506(d), 1507(d), and 1508

(a to c) of this title) shall be construed to affect the validity

of any insurance contract entered into prior to the enactment of

this Act (Aug. 1, 1947) insofar as such contract covers the 1947

crop year. Any such contract which purports to cover a crop in the

1948 or any subsequent crop year in any county in which insurance

on such crop will be discontinued pursuant to this Act is hereby

terminated at the end of the 1947 crop year.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1505, 1506, 1507, 1515,

1516, 1522, 1523, 2008f, 7211, 7333 of this title.

-CITE-

7 USC Sec. 1508a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1508a. Double insurance and prevented planting

-STATUTE-

(a) Definitions

In this section:

(1) First crop

The term ''first crop'' means the first crop of the first

agricultural commodity planted for harvest, or prevented from

being planted, on specific acreage during a crop year and insured

under this chapter.

(2) Second crop

The term ''second crop'' means a second crop of the same

agricultural commodity as the first crop, or a crop of a

different agricultural commodity following the first crop,

planted on the same acreage as the first crop for harvest in the

same crop year, except the term does not include a replanted

crop.

(3) Replanted crop

The term ''replanted crop'' means any agricultural commodity

replanted on the same acreage as the first crop for harvest in

the same crop year if the replanting is required by the terms of

the policy of insurance covering the first crop.

(b) Double insurance

(1) Options on loss to first crop

Except as provided in subsections (d) and (e) of this section,

if a first crop insured under this chapter in a crop year has a

total or partial insurable loss, the producer of the first crop

may elect one of the following options:

(A) No second crop planted

The producer may -

(i) elect to not plant a second crop on the same acreage

for harvest in the same crop year; and

(ii) collect an indemnity payment that is equal to 100

percent of the insurable loss for the first crop.

(B) Second crop planted

The producer may -

(i) plant a second crop on the same acreage for harvest in

the same crop year; and

(ii) collect an indemnity payment established by the

Corporation for the first crop, but not to exceed 35 percent

of the insurable loss for the first crop.

(2) Effect of no loss to second crop

If a producer makes an election under paragraph (1)(B) and the

producer does not suffer an insurable loss to the second crop,

the producer may collect an indemnity payment for the first crop

that is equal to -

(A) 100 percent of the insurable loss for the first crop;

less

(B) the amount previously collected under paragraph

(1)(B)(ii).

(3) Premium for first crop if second crop planted

(A) Initial premium

If a producer makes an election under paragraph (1)(B), the

producer shall be responsible for a premium for the first crop

that is commensurate with the indemnity paid under paragraph

(1)(B)(ii). The Corporation shall adjust the total premium for

the first crop to reflect the reduced indemnity.

(B) Effect of no loss to second crop

If the producer makes an election under paragraph (1)(B) and

the producer does not suffer an insurable loss to the second

crop, the producer shall be responsible for a premium for the

first crop that is equal to -

(i) the full premium owed by the producer for the first

crop; less

(ii) the amount of premium previously paid under

subparagraph (A).

(c) Prevented planting coverage

(1) Options on loss to first crop

Except as provided in subsections (d) and (e) of this section,

if a first crop insured under this chapter in a crop year is

prevented from being planted, the producer of the first crop may

elect one of the following options:

(A) No second crop planted

The producer may -

(i) elect to not plant a second crop on the same acreage

for harvest in the same crop year; and

(ii) subject to paragraph (4), collect an indemnity payment

that is equal to 100 percent of the prevented planting

guarantee for the acreage for the first crop.

(B) Second crop planted

The producer may -

(i) plant a second crop on the same acreage for harvest in

the same crop year; and

(ii) subject to paragraphs (4) and (5), collect an

indemnity payment established by the Corporation for the

first crop, but not to exceed 35 percent of the prevented

planting guarantee for the acreage for the first crop.

(2) Premium for first crop if second planted

If the producer makes an election under paragraph (1)(B), the

producer shall pay a premium for the first crop that is

commensurate with the indemnity paid under paragraph (1)(B)(ii).

The Corporation shall adjust the total premium for the first crop

to reflect the reduced indemnity.

(3) Effect on actual production history

Except in the case of double cropping described in subsection

(d) of this section, if a producer make an election under

paragraph (1)(B) for a crop year, the Corporation shall assign

the producer a recorded yield for that crop year for the first

crop equal to 60 percent of the producer's actual production

history for the agricultural commodity involved, for purposes of

determining the producer's actual production history for

subsequent crop years.

(4) Area conditions required for payment

The Corporation shall limit prevented planting payments for

producers to those situations in which other producers, in the

area where a first crop is prevented from being planted is

located, are also generally affected by the conditions that

prevented the first crop from being planted.

(5) Planting date

If a producer plants the second crop before the latest planting

date established by the Corporation for the first crop, the

Corporation shall not make a prevented planting payment with

regard to the first crop.

(d) Exception for established double cropping practices

A producer may receive full indemnity payments on two or more

crops planted for harvest in the same crop year and insured under

this chapter if each of the following conditions are met:

(1) There is an established practice of planting two or more

crops for harvest in the same crop year in the area, as

determined by the Corporation.

(2) An additional coverage policy or plan of insurance is

offered with respect to the agricultural commodities planted on

the same acreage for harvest in the same crop year in the area.

(3) The producer has a history of planting two or more crops

for harvest in the same crop year or the applicable acreage has

historically had two or more crops planted for harvest in the

same crop year.

(4) The second or more crops are customarily planted after the

first crop for harvest on the same acreage in the same year in

the area.

(e) Subsequent crops

Except in the case of double cropping described in subsection (d)

of this section, if a producer elects to plant a crop (other than a

replanted crop) subsequent to a second crop on the same acreage as

the first crop and second crop for harvest in the same crop year,

the producer shall not be eligible for insurance under this

chapter, or noninsured crop assistance under section 7333 of this

title, for the subsequent crop.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 508A, as added Pub. L.

106-224, title I, Sec. 108, June 20, 2000, 114 Stat. 368.)

-MISC1-

PRIOR PROVISIONS

A prior section 1508a, act Feb. 16, 1938, ch. 30, title V, Sec.

508A, as added Aug. 14, 1989, Pub. L. 101-82, title VI, Sec. 604,

103 Stat. 587; amended Aug. 10, 1993, Pub. L. 103-66, title XIV,

Sec. 1403(b)(3), 107 Stat. 334, related to crop insurance yield

coverage, prior to repeal by Pub. L. 103-354, title I, Sec. 107,

120, Oct. 13, 1994, 108 Stat. 3197, 3208, effective Oct. 13, 1994,

and applicable to provision of crop insurance beginning with 1995

crop year.

EFFECTIVE DATE

Section applicable beginning with the 2001 crop of an

agricultural commodity, see section 171(b)(2)(F) of Pub. L.

106-224, set out as an Effective Date of 2000 Amendment note under

section 1501 of this title.

-CITE-

7 USC Sec. 1509 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1509. Exemption of indemnities from levy

-STATUTE-

Claims for indemnities under this chapter shall not be liable to

attachment, levy, garnishment, or any other legal process before

payment to the insured or to deduction on account of the

indebtedness of the insured or the estate of the insured to the

United States except claims of the United States or the Corporation

arising under this chapter.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 509, 52 Stat. 75; Pub. L.

103-354, title I, Sec. 115(c), Oct. 13, 1994, 108 Stat. 3204.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''or the estate of the

insured'' for ''or his estate''.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-CITE-

7 USC Sec. 1510 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1510. Deposit and investment of funds; Federal Reserve banks

as fiscal agents

-STATUTE-

All money of the Corporation not otherwise employed may be

deposited with the Treasurer of the United States or in any bank

approved by the Secretary of the Treasury, subject to withdrawal by

the Corporation at any time, or with the approval of the Secretary

of the Treasury may be invested in obligations of the United States

or in obligations guaranteed as to principal and interest by the

United States. Subject to the approval of the Secretary of the

Treasury, the Federal Reserve banks are hereby authorized and

directed to act as depositories, custodians, and fiscal agents for

the Corporation in the performance of its powers conferred by this

chapter.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 510, 52 Stat. 75.)

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-CITE-

7 USC Sec. 1511 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1511. Tax exemption

-STATUTE-

The Corporation, including its franchise, its capital, reserves,

and surplus, and its income and property, shall be exempt from all

taxation on or after February 16, 1938, imposed by the United

States or by any Territory, dependency, or possession thereof, or

by any State, county, municipality, or local taxing authority. A

contract of insurance of the Corporation, and a contract of

insurance reinsured by the Corporation, shall be exempt from

taxation imposed by any State, municipality, or local taxing

authority.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 511, 52 Stat. 75; Pub. L.

103-354, title I, Sec. 108, Oct. 13, 1994, 108 Stat. 3197.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 inserted at end ''A contract of insurance

of the Corporation, and a contract of insurance reinsured by the

Corporation, shall be exempt from taxation imposed by any State,

municipality, or local taxing authority.''

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-CITE-

7 USC Sec. 1512 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1512. Corporation as fiscal agent of Government

-STATUTE-

When designated for that purpose by the Secretary of the

Treasury, the Corporation shall be a depository of public money,

except receipts from customs, under such regulations as may be

prescribed by said Secretary; and it may also be employed as a

financial agent of the Government; and it shall perform all such

reasonable duties, as a depository of public money and financial

agent of the Government, as may be required of it.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 512, 52 Stat. 75.)

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-CITE-

7 USC Sec. 1513 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1513. Books of account and annual reports of Corporation

-STATUTE-

The Corporation shall at all times maintain complete and accurate

books of accounts and shall file annually with the Secretary a

complete report as to the business of the Corporation.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 513, 52 Stat. 76; Pub. L.

93-604, title VI, Sec. 603, Jan. 2, 1975, 88 Stat. 1963; Pub. L.

103-354, title I, Sec. 102(b)(4)(C), Oct. 13, 1994, 108 Stat.

3181.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Secretary'' for ''Secretary

of Agriculture''.

1975 - Pub. L. 93-604 struck out provisions that financial

transactions of Corporation shall be audited at least once each

year by the General Accounting Office for the sole purpose of

making a report to Congress, together with such recommendations as

the Comptroller General of the United States may deem advisable and

the proviso that such report shall not be made until the

Corporation shall have had reasonable opportunity to examine the

exceptions and criticisms of the Comptroller General or the General

Accounting Office, to point out errors therein, explain or answer

the same, and to file a statement which shall be submitted by

Comptroller General with his report.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-MISC5-

AUDIT OF GOVERNMENT CORPORATIONS

Section 9105(f) of Title 31, Money and Finance, provides that an

audit under subsection (a) of that section is in place of an audit

of the financial transactions of a Government corporation the

Comptroller General is required to make in reporting to Congress or

the President under another law.

-CITE-

7 USC Sec. 1514 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1514. Crimes and offenses

-STATUTE-

(a) to (e) Repealed. June 25, 1948, ch. 645, Sec. 21, 62 Stat. 862,

eff. Sept. 1, 1948

(f) Application of laws on interest of Members of Congress in

contracts

The provisions of section 22 of title 41 shall not apply to any

crop insurance agreements made under this chapter.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 514, 52 Stat. 76; June 25,

1948, ch. 645, Sec. 4, 21, 62 Stat. 859, 862.)

-MISC1-

AMENDMENTS

1948 - Subsecs. (a) to (e). Act June 25, 1948, Sec. 21, repealed

provisions relating to crimes and offenses. See sections 371, 433,

657, 658, 1006, 1014, and former section 1093 of Title 18, Crimes

and Criminal Procedure.

Subsec. (f). Act June 25, 1948, Sec. 4, struck out provisions

relating to former sections 202 to 207 of Title 18. See sections

202, 216, 431 to 433 of Title 18.

EFFECTIVE DATE OF 1948 AMENDMENT

Amendment by act June 25, 1948, effective Sept. 1, 1948, see

section 20 of that act.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-CITE-

7 USC Sec. 1515 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1515. Program compliance and integrity

-STATUTE-

(a) Purpose

(1) In general

The purpose of this section is to improve compliance with, and

the integrity of, the Federal crop insurance program.

(2) Role of insurance providers

The Corporation shall work actively with approved insurance

providers to address program compliance and integrity issues as

such issues develop.

(b) Notification of compliance problems

(1) Notification of errors, omissions, and failures

The Corporation shall notify in writing an approved insurance

provider of any error, omission, or failure to follow Corporation

regulations or procedures for which the approved insurance

provider may be responsible and which may result in a debt owed

the Corporation.

(2) Time for notification

Notice under paragraph (1) shall be given within 3 years after

the end of the insurance period during which the error, omission,

or failure is alleged to have occurred, except that this time

limitation shall not apply with respect to an error, omission, or

procedural violation that is willful or intentional.

(3) Effect of failure to timely notify

Except as provided in paragraph (2), the failure to timely

provide the notice required under this subsection shall relieve

the approved insurance provider from the debt owed the

Corporation.

(c) Reconciling producer information

The Secretary shall develop and implement a coordinated plan for

the Corporation and the Farm Service Agency to reconcile all

relevant information received by the Corporation or the Farm

Service Agency from a producer who obtains crop insurance coverage

under this chapter. Beginning with the 2001 crop year, the

Secretary shall require that the Corporation and the Farm Service

Agency reconcile such producer-derived information on at least an

annual basis in order to identify and address any discrepancies.

(d) Identification and elimination of fraud, waste, and abuse

(1) FSA monitoring program

The Secretary shall develop and implement a coordinated plan

for the Farm Service Agency to assist the Corporation in the

ongoing monitoring of programs carried out under this chapter,

including -

(A) at the request of the Corporation or, subject to

paragraph (2), on its own initiative if the Farm Service Agency

has reason to suspect the existence of program fraud, waste, or

abuse, conducting fact finding relative to allegations of

program fraud, waste, or abuse;

(B) reporting to the Corporation, in writing in a timely

manner, the results of any fact finding conducted pursuant to

subparagraph (A), any allegation of fraud, waste, or abuse, and

any identified program vulnerabilities; and

(C) assisting the Corporation and approved insurance

providers in auditing a statistically appropriate number of

claims made under any policy or plan of insurance under this

chapter.

(2) FSA inquiry

If, within five calendar days after receiving a report

submitted under paragraph (1)(B), the Corporation does not

provide a written response that describes the intended actions of

the Corporation, the Farm Service Agency may conduct its own

inquiry into the alleged program fraud, waste, or abuse on

approval from the State director of the Farm Service Agency of

the State in which the alleged fraud, waste, or abuse occurred.

If as a result of the inquiry, the Farm Service Agency concludes

further investigation is warranted, but the Corporation declines

to proceed with the investigation, the Farm Service Agency may

refer the matter to the Inspector General of the Department of

Agriculture.

(3) Use of field infrastructure

The plan required by paragraph (1) shall provide for the use of

the field infrastructure of the Farm Service Agency. The

Secretary shall ensure that relevant Farm Service Agency

personnel are appropriately trained for any responsibilities

assigned to the personnel under the plan. At a minimum, the

personnel shall receive the same level of training and pass the

same basic competency tests as required of loss adjusters of

approved insurance providers.

(4) Maintenance of provider effort

(A) In general

The activities of the Farm Service Agency under this

subsection do not affect the responsibility of approved

insurance providers to conduct any audits of claims or other

program reviews required by the Corporation.

(B) Notification of providers

The Corporation shall notify the appropriate approved

insurance provider of a report from the Farm Service Agency

regarding alleged program fraud, waste, or abuse, unless the

provider is suspected to be included in, or a party to, the

alleged fraud, waste, or abuse.

(C) Response

An approved insurance provider that receives a notice under

subparagraph (B) shall submit a report to the Corporation,

within an appropriate time period determined by the Secretary,

describing the actions taken by the provider to investigate the

allegations of program fraud, waste, or abuse contained in the

notice.

(5) Corporation response to provider reports

(A) Prompt response

If an approved insurance provider reports to the Corporation

that the approved insurance provider suspects intentional

misrepresentation, fraud, waste, or abuse, the Corporation

shall make a determination and provide, within 90 calendar days

after receiving the report, a written response that describes

the intended actions of the Corporation.

(B) Cooperative effort

The approved insurance provider and the Corporation shall

take coordinated action in any case where misrepresentation,

fraud, waste, or abuse is alleged.

(C) Failure to timely respond

If the Corporation fails to respond as required by

subparagraph (A), an approved insurance provider may request

the Farm Service Agency to assist the provider in an inquiry

into the alleged program fraud, waste, or abuse.

(e) Consultation with State FSA committees

The Secretary shall establish procedures under which the

Corporation shall consult with the State committee of the Farm

Service Agency for a State with respect to policies, plans of

insurance, and material related to such policies or plans of

insurance (including applicable sales closing dates, assigned

yields, and transitional yields) offered in that State under this

chapter.

(f) Detection of disparate performance

(1) Covered activities

The Secretary shall establish procedures under which the

Corporation will be able to identify the following:

(A) Any agent engaged in the sale of coverage offered under

this chapter where the loss claims associated with such sales

by the agent are equal to or greater than 150 percent (or an

appropriate percentage specified by the Corporation) of the

mean for all loss claims associated with such sales by all

other agents operating in the same area, as determined by the

Corporation.

(B) Any person performing loss adjustment services relative

to coverage offered under this chapter where such loss

adjustments performed by the person result in accepted or

denied claims equal to or greater than 150 percent (or an

appropriate percentage specified by the Corporation) of the

mean for accepted or denied claims (as applicable) for all

other persons performing loss adjustment services in the same

area, as determined by the Corporation.

(2) Review

(A) Review required

The Corporation shall conduct a review of any agent

identified pursuant to paragraph (1)(A), and any person

identified pursuant to paragraph (1)(B), to determine whether

the higher loss claims associated with the agent or the higher

number of accepted or denied claims (as applicable) associated

with the person are the result of fraud, waste, or abuse.

(B) Remedial action

The Corporation shall take appropriate remedial action with

respect to any occurrence of fraud, waste, or abuse identified

in a review conducted under this paragraph.

(3) Oversight of agents and loss adjusters

The Corporation shall develop procedures to require an annual

review by an approved insurance provider of the performance of

each agent and loss adjuster used by the approved insurance

provider. The Corporation shall oversee the conduct of annual

reviews and may consult with an approved insurance provider

regarding any remedial action that is determined to be necessary

as a result of the annual review of an agent or loss adjuster.

(g) Submission of information to Corporation to support compliance

efforts

(1) Types of information required

The Secretary shall establish procedures under which approved

insurance providers shall submit to the Corporation the following

information with respect to each policy or plan of insurance

offered under this chapter:

(A) The name and identification number of the insured.

(B) The agricultural commodity to be insured.

(C) The elected coverage level, including the price election,

of the insured.

(2) Time for submission

The information required by paragraph (1) with respect to a

policy or plan of insurance shall be submitted so as to ensure

receipt by the Corporation not later than the Saturday of the

week containing the calendar day that is 30 days after the

applicable sales closing date for the crop to be insured.

(h) Sanctions for program noncompliance and fraud

(1) False information

A producer, agent, loss adjuster, approved insurance provider,

or other person that willfully and intentionally provides any

false or inaccurate information to the Corporation or to an

approved insurance provider with respect to a policy or plan of

insurance under this chapter may, after notice and an opportunity

for a hearing on the record, be subject to one or more of the

sanctions described in paragraph (3).

(2) Compliance

A person may, after notice and an opportunity for a hearing on

the record, be subject to one or more of the sanctions described

in paragraph (3) if the person is a producer, agent, loss

adjuster, approved insurance provider, or other person that

willfully and intentionally fails to comply with a requirement of

the Corporation.

(3) Authorized sanctions

If the Secretary determines that a person covered by this

subsection has committed a material violation under paragraph (1)

or (2), the following sanctions may be imposed:

(A) Civil fines

A civil fine may be imposed for each violation in an amount

not to exceed the greater of -

(i) the amount of the pecuniary gain obtained as a result

of the false or inaccurate information provided or the

noncompliance with a requirement of this chapter; or

(ii) $10,000.

(B) Producer disqualification

In the case of a violation committed by a producer, the

producer may be disqualified for a period of up to 5 years from

receiving any monetary or nonmonetary benefit provided under

each of the following:

(i) This chapter.

(ii) The Agricultural Market Transition Act (7 U.S.C. 7201

et seq.), including the noninsured crop disaster assistance

program under section 196 of that Act (7 U.S.C. 7333).

(iii) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).

(iv) The Commodity Credit Corporation Charter Act (15

U.S.C. 714 et seq.).

(v) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281

et seq.).

(vi) Title XII of the Food Security Act of 1985 (16 U.S.C.

3801 et seq.).

(vii) The Consolidated Farm and Rural Development Act (7

U.S.C. 1921 et seq.).

(viii) Any law that provides assistance to a producer of an

agricultural commodity affected by a crop loss or a decline

in the prices of agricultural commodities.

(C) Disqualification of other persons

In the case of a violation committed by an agent, loss

adjuster, approved insurance provider, or other person (other

than a producer), the violator may be disqualified for a period

of up to 5 years from participating in any program, or

receiving any benefit, under this chapter.

(4) Assessment of sanction

The Secretary shall consider the gravity of the violation of

the person covered by this subsection in determining -

(A) whether to impose a sanction under this subsection; and

(B) the type and amount of the sanction to be imposed.

(5) Disclosure of sanctions

Each policy or plan of insurance under this chapter shall

provide notice describing the sanctions prescribed under

paragraph (3) for willfully and intentionally -

(A) providing false or inaccurate information to the

Corporation or to an approved insurance provider; or

(B) failing to comply with a requirement of the Corporation.

(6) Insurance fund

Any funds collected under this subsection shall be deposited

into the insurance fund established under section 1516(c) of this

title.

(i) Annual report on program compliance and integrity efforts

(1) Report required

The Secretary shall submit to the Committee on Agriculture of

the House of Representatives and the Committee on Agriculture,

Nutrition, and Forestry of the Senate an annual report describing

the operation of this section during the preceding year and

efforts undertaken by the Secretary and the Corporation to carry

out this section.

(2) Information regarding fraud, waste, and abuse

The report shall identify specific occurrences of waste, fraud,

or abuse and contain an outline of actions that have been or are

being taken to eliminate the identified waste, fraud, or abuse.

(j) Information management

(1) Systems upgrades

The Secretary shall upgrade the information management systems

of the Corporation used in the administration and enforcement and

this chapter. In upgrading the systems, the Secretary shall

ensure that new hardware and software are compatible with the

hardware and software used by other agencies of the Department to

maximize data sharing and promote the purpose of this section.

(2) Use of available information technologies

The Secretary shall use the information technologies known as

data mining and data warehousing and other available information

technologies to administer and enforce this chapter.

(3) Use of private sector

The Secretary may enter into contracts to use private sector

expertise and technological resources in implementing this

subsection.

(k) Funding

(1) Available funds

To carry out this section and sections 1502(c), 1506(h),

1508(a)(3)(B), and 1508(f)(3)(A) of this title, the Corporation

may use, from amounts made available from the insurance fund

established under section 1516(c) of this title, not more than

$23,000,000 during the period of fiscal years 2001 through 2005,

of which not more than $9,000,000 shall be available for fiscal

year 2001.

(2) Prohibition

None of the funds made available under paragraph (1) may be

used to pay the salaries of employees of the Corporation.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 515, as added Pub. L.

103-354, title I, Sec. 109, Oct. 13, 1994, 108 Stat. 3197; amended

Pub. L. 106-224, title I, Sec. 121(a), June 20, 2000, 114 Stat.

372.)

-REFTEXT-

REFERENCES IN TEXT

The Agricultural Market Transition Act, referred to in subsec.

(h)(3)(B)(ii), is title I of Pub. L. 104-127, Apr. 4, 1996, 110

Stat. 896, as amended, which is classified principally to chapter

100 (Sec. 7201 et seq.) of this title. For complete classification

of this Act to the Code, see References in Text note set out under

section 7201 of this title and Tables.

The Agricultural Act of 1949, referred to in subsec.

(h)(3)(B)(iii), is act Oct. 31, 1949, ch. 792, 63 Stat. 1051, as

amended, which is classified principally to chapter 35A (Sec. 1421

et seq.) of this title. For complete classification of this Act to

the Code, see Short Title note set out under section 1421 of this

title and Tables.

The Commodity Credit Corporation Charter Act, referred to in

subsec. (h)(3)(B)(iv), is act June 29, 1948, ch. 704, 62 Stat.

1070, as amended, which is classified generally to subchapter II

(Sec. 714 et seq.) of chapter 15 of Title 15, Commerce and Trade.

For complete classification of this Act to the Code, see Short

Title note set out under section 714 of Title 15 and Tables.

The Agricultural Adjustment Act of 1938, referred to in subsec.

(h)(3)(B)(v), is act Feb. 16, 1938, ch. 30, 52 Stat. 31, as

amended, which is classified principally to chapter 35 (Sec. 1281

et seq.) of this title. For complete classification of this Act to

the Code, see section 1281 of this title and Tables.

The Food Security Act of 1985, referred to in subsec.

(h)(3)(B)(vi), is Pub. L. 99-198, Dec. 23, 1985, 99 Stat. 1354, as

amended. Title XII of the Act, popularly known as the ''Sodbuster

Law'', is classified principally to chapter 58 (Sec. 3801 et seq.)

of Title 16, Conservation. For complete classification of this Act

to the Code, see Short Title of 1985 Amendment note set out under

section 1281 of this title and Tables.

The Consolidated Farm and Rural Development Act, referred to in

subsec. (h)(3)(B)(vii), is title III of Pub. L. 87-128, Aug. 8,

1961, 75 Stat. 307, as amended, which is classified principally to

chapter 50 (Sec. 1921 et seq.) of this title. For complete

classification of the Act to the Code, see Short Title note set out

under section 1921 of this title and Tables.

-MISC2-

PRIOR PROVISIONS

A prior section, act Feb. 16, 1938, ch. 30, title V, Sec. 515, 52

Stat. 77, provided for appointment and compensation of an advisory

committee, prior to repeal by Pub. L. 96-365, title I, Sec. 108,

Sept. 26, 1980, 94 Stat. 1317.

AMENDMENTS

2000 - Pub. L. 106-224 amended section generally, substituting

present provisions for provisions which had authorized

establishment of Advisory Committee for Federal Crop Insurance,

described primary responsibility, membership of Committee, and

administrative provisions, required annual report regarding

progress toward implementation and improved crop insurance

coverage, soundness of program, and rate of participation, and set

forth termination of authority on Sept. 30, 1998.

EFFECTIVE DATE

Section effective Oct. 13, 1994, and applicable to provision of

crop insurance under Federal Crop Insurance Act (7 U.S.C. 1501 et

seq.) beginning with 1995 crop year, with such Act, as in effect on

the day before Oct. 13, 1994, to continue to apply with respect to

1994 crop year, see section 120 of Pub. L. 103-354, set out as an

Effective Date of 1994 Amendment note under section 1502 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1516, 8002 of this title.

-CITE-

7 USC Sec. 1516 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1516. Funding

-STATUTE-

(a) Authorization of appropriations

(1) Discretionary expenses

There are authorized to be appropriated for fiscal year 1999

and each subsequent fiscal year such sums as are necessary to

cover the salaries and expenses of the Corporation.

(2) Mandatory expenses

There are authorized to be appropriated such sums as are

necessary to cover for each of the 1999 and subsequent

reinsurance years the following:

(A) The administrative and operating expenses of the

Corporation for the sales commissions of agents.

(B) Premium subsidies, including the administrative and

operating expenses of an approved insurance provider for the

delivery of policies with additional coverage.

(C) Costs associated with the conduct of livestock and wild

salmon pilot programs carried out under section 1523 of this

title, subject to the limitations in subsections (a)(3)(E)(ii)

and (b)(10) of section 1523 of this title.

(D) Costs associated with the reimbursement, contracting, and

partnerships for research and development under section 1522 of

this title.

(b) Payment of Corporation expenses from insurance fund

(1) Expenses generally

For each of the 1999 and subsequent reinsurance years, the

Corporation may pay from the insurance fund established under

subsection (c) of this section all expenses of the Corporation

(other than expenses covered by subsection (a)(1) of this section

and expenses covered by paragraph (2)(A)), including the

following:

(A) Premium subsidies and indemnities.

(B) Administrative and operating expenses of the Corporation

necessary to pay the sales commissions of agents.

(C) All administrative and operating expense reimbursements

due under a reinsurance agreement with an approved insurance

provider.

(D) Costs associated with the conduct of livestock and wild

salmon pilot programs carried out under section 1523 of this

title, subject to the limitations in subsections (a)(3)(E)(ii)

and (b)(10) of section 1523 of this title.

(E) Costs associated with the reimbursement, contracting, and

partnerships for research and development under section 1522 of

this title.

(2) Policy consideration and implementation

(A) In general

For each of the 1999 and subsequent reinsurance years, the

Corporation may use the insurance fund established under

subsection (c) of this section, but not to exceed $3,500,000

for each fiscal year, to pay the following:

(i) Costs associated with the consideration and

implementation of policies, plans of insurance, and related

materials submitted under section 1508(h) of this title or

developed under section 1522 or 1523 of this title.

(ii) Costs to contract for the review of policies, plans of

insurance, and related materials under section 1505(e) of

this title and to contract for other assistance in

considering policies, plans of insurance, and related

materials.

(B) Dairy options pilot program

Amounts necessary to carry out the dairy options pilot

program shall not be counted toward the limitation on expenses

specified in subparagraph (A).

(c) Insurance fund

(1) In general

There is established an insurance fund, for the deposit of

premium income, amounts made available under subsection (a)(2) of

this section, and civil fines collected under section 1515(h) of

this title, to be available without fiscal year limitation.

(2) Commodity Credit Corporation funds

If at any time the amounts in the insurance fund are

insufficient to enable the Corporation to carry out subsection

(b) of this section, to the extent the funds of the Commodity

Credit Corporation are available -

(A) the Corporation may request the Secretary to use the

funds of the Commodity Credit Corporation to carry out

subsection (b) of this section; and

(B) the Secretary may use the funds of the Commodity Credit

Corporation to carry out subsection (b) of this section.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 516, 52 Stat. 77; June 21,

1941, ch. 214, Sec. 6, 8, 55 Stat. 255, 256; Aug. 3, 1956, ch. 950,

Sec. 10, 70 Stat. 1034; Pub. L. 96-365, title I, Sec. 109, 110,

Sept. 26, 1980, 94 Stat. 1317, 1318; Pub. L. 97-11, May 22, 1981,

95 Stat. 13; Pub. L. 99-198, title X, Sec. 1021, Dec. 23, 1985, 99

Stat. 1459; Pub. L. 103-354, title I, Sec. 110, Oct. 13, 1994, 108

Stat. 3198; Pub. L. 104-127, title I, Sec. 193(e), Apr. 4, 1996,

110 Stat. 945; Pub. L. 105-185, title V, Sec. 531, June 23, 1998,

112 Stat. 580; Pub. L. 106-224, title I, Sec. 147, June 20, 2000,

114 Stat. 393.)

-MISC1-

AMENDMENTS

2000 - Subsec. (a)(2). Pub. L. 106-224, Sec. 147(a), in

introductory provisions, substituted ''years the following:'' for

''years - '', in subpar. (A), substituted ''The'' for ''the'' and a

period for ''; and'' at end, in subpar. (B), substituted

''Premium'' for ''premium'', and added subpars. (C) and (D).

Subsec. (b)(1). Pub. L. 106-224, Sec. 147(b), in introductory

provisions, substituted ''including the following:'' for

''including - '', in subpar. (A), substituted ''Premium'' for

''premium'' and a period for the semicolon at end, in subpar. (B),

substituted ''Administrative'' for ''administrative'' and a period

for ''; and'' at end, in subpar. (C), substituted ''All'' for

''all'', and added subpars. (D) and (E).

Subsec. (b)(2). Pub. L. 106-224, Sec. 147(c)(1), substituted

''Policy consideration and implementation'' for ''Research and

development expenses'' in heading.

Subsec. (b)(2)(A). Pub. L. 106-224, Sec. 147(c)(2), substituted

''may use'' for ''may pay from'', struck out ''research and

development expenses of the Corporation'' before '', but not to

exceed'', substituted '', to pay the following:'' for period at

end, and added cls. (i) and (ii).

Subsec. (b)(2)(B). Pub. L. 106-224, Sec. 147(c)(3), struck out

''research and development'' after ''the limitation on''.

Subsec. (c)(1). Pub. L. 106-224, Sec. 147(d), substituted

''income,'' for ''income and'' and inserted '', and civil fines

collected under section 1515(h) of this title'' before '', to be

available''.

1998 - Subsec. (a)(1). Pub. L. 105-185, Sec. 531(1)(A), added

par. (1) and struck out heading and text of former par. (1). Text

read as follows: ''There are authorized to be appropriated for each

of fiscal years 1995 through 2001 such sums as are necessary to

cover -

''(A) the salaries and expenses of the Corporation; and

''(B) the administrative and operating expenses of the

Corporation for the sales commissions of agents.''

Subsec. (a)(2). Pub. L. 105-185, Sec. 531(1)(B)(i), inserted

''for each of the 1999 and subsequent reinsurance years'' after

''are necessary to cover'' in introductory provisions.

Subsec. (a)(2)(A). Pub. L. 105-185, Sec. 531(1)(B)(ii), added

subpar. (A) and struck out former subpar. (A) which read as

follows: ''in the case of each of the 1995 through 1997 reinsurance

years, the administrative and operating expenses of the Corporation

for the sales commissions of agents, consistent with subsection

(b)(1) of this section; and''.

Subsec. (b). Pub. L. 105-185, Sec. 531(2), added subsec. (b) and

struck out heading and text of former subsec. (b). Text read as

follows:

''(1) Administrative and operating expenses. - In the case of

each of the 1995 through 1997 reinsurance years, the Corporation is

authorized to pay from the insurance fund established under

subsection (c) of this section, the administrative and operating

expenses of an approved insurance provider, including expenses

covered by subsection (a)(1)(B) of this section.

''(2) Other expenses. - The Corporation is authorized to pay from

the insurance fund established under subsection (c) of this section

-

''(A) all other expenses of the Corporation (other than

expenses covered by subsection (a)(1) of this section), including

all premium subsidies and indemnities;

''(B) in the case of each of the 1995 through 1997 reinsurance

years, all administrative and expense reimbursements due under a

reinsurance agreement with an approved insurance provider; and

''(C) to the extent necessary, expenses incurred by the

Corporation to carry out research and development.''

1996 - Subsec. (a)(2)(C). Pub. L. 104-127, Sec. 193(e)(1), struck

out subpar. (C) which read as follows: ''payments for noninsured

assistance losses under section 1519 of this title.''

Subsec. (b)(1). Pub. L. 104-127, Sec. 193(e)(2)(A), struck out

subpar. (A) designation and heading ''In general'', substituted

''In the case of each'' for ''Except as provided in subparagraph

(B), in the case of each'', and struck out heading and text of

subpar. (B). Prior to amendment, text read as follows: ''In the

case of the 1997 reinsurance year, the amount of the payments from

the insurance fund established under subsection (c) of this section

for the expenses of the Corporation for the sales commissions of

agents may not exceed 8.5 percent of the total amount of premiums

paid for additional coverage for the 1997 reinsurance year.''

Subsec. (b)(2)(A). Pub. L. 104-127, Sec. 193(e)(3), struck out

'', noninsured assistance benefits,'' after ''all premium

subsidies''.

Subsec. (b)(2)(B). Pub. L. 104-127, Sec. 193(e)(2)(B), struck out

''subject to paragraph (1)(B),'' before ''in the case of each''.

1994 - Pub. L. 103-354 amended section generally, substituting

subsecs. (a) to (c) for former subsecs. (a) to (d) relating to

authorization of appropriations to cover operating and

administrative costs of Corporation, issuance of regulations,

emergency funding, and borrowing authority.

1985 - Subsec. (c)(1). Pub. L. 99-198 struck out provision that

Secretary's authority to use the funds of Commodity Credit

Corporation for purposes of this subsection would expire one year

after date on which that authority was first used.

1981 - Subsec. (a). Pub. L. 97-11 designated existing provisions

as par. (1) and added par. (2).

1980 - Subsec. (a). Pub. L. 96-365, Sec. 109, substituted

appropriations authorization of necessary sums for former

limitation of $12,000,000 for each fiscal year beginning after June

30, 1938; included as costs agents' and brokers' commissions,

interest on Treasury notes and other obligations, partial premium

payments by the Corporation, and the direct cost of loss adjusters

for crop inspections and loss adjustments and authorized payment of

these costs from premium income and other Corporation funds and

restoration of such payments through subsequent year

appropriations; prescribed limitation on employment of additional

personnel except during emergencies; and deleted provisions for for

consideration as being nonadministrative or nonoperating expenses

such expenses as related to purchase, transportation, handling, or

sale of the agricultural commodity and the direct cost of loss

adjusters for crop inspections and loss adjustments and provision

for use of premium income for administrative and operating costs

within limits prescribed in applicable appropriations.

Subsecs. (c), (d). Pub. L. 96-365, Sec. 110, added subsecs. (c)

and (d).

1956 - Subsec. (a). Act Aug. 3, 1956, added to list of costs

which may be considered as nonadministrative or nonoperating, the

direct cost of loss adjusters for crop inspections and loss

adjustment, and authorized use of premium income for administrative

and operating costs within limits prescribed by applicable

appropriation.

1941 - Subsec. (a). Act June 21, 1941, substituted ''the

agricultural commodity'' for ''wheat'', and ''$12,000,000'' for

''$6,000,000''.

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by Pub. L. 105-185 effective July 1, 1998, see section

537 of Pub. L. 105-185, set out as a note under section 1506 of

this title.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Section 109 of Pub. L. 96-365 provided that the amendment made by

that section is effective Oct. 1, 1980.

Section 110 of Pub. L. 96-365 provided that the amendment made by

that section is effective Oct. 1, 1980.

-TRANS-

TRANSFER OF FUNCTIONS

Administration of program of Federal Crop Insurance Corporation

transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3,

Sec. 501, eff. July 16, 1946, 11 F.R. 7877, 60 Stat. 1100. See

note set out under section 1503 of this title.

Wartime consolidation of Federal Crop Insurance Corporation into

Agricultural Conservation and Adjustment Administration, see note

set out under section 1503 of this title.

-MISC5-

ADDITIONAL APPROPRIATION

Act Dec. 23, 1944, ch. 713, Sec. 6, 58 Stat. 920, provided an

additional appropriation not to exceed $3,000,000 to be available

for the fiscal year 1945 to carry out the provisions of this

chapter for the fiscal years 1943 and 1944.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1505, 1507, 1508, 1515,

1522 of this title.

-CITE-

7 USC Sec. 1517 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1517. Separability

-STATUTE-

The sections of this chapter and subdivisions of sections are

declared to be separable, and in the event any one or more sections

or parts of the same of this chapter be held to be

unconstitutional, the same shall not affect the validity of other

sections or parts of sections of this chapter.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 517, 52 Stat. 77.)

-CITE-

7 USC Sec. 1518 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1518. ''Agricultural commodity'' defined

-STATUTE-

''Agricultural commodity'', as used in this chapter, means wheat,

cotton, flax, corn, dry beans, oats, barley, rye, tobacco, rice,

peanuts, soybeans, sugar beets, sugar cane, tomatoes, grain

sorghum, sunflowers, raisins, oranges, sweet corn, dry peas,

freezing and canning peas, forage, apples, grapes, potatoes, timber

and forests, nursery crops, citrus, and other fruits and

vegetables, nuts, tame hay, native grass, aquacultural species

(including, but not limited to, any species of finfish, mollusk,

crustacean, or other aquatic invertebrate, amphibian, reptile, or

aquatic plant propagated or reared in a controlled or selected

environment), or any other agricultural commodity, excluding stored

grain, determined by the Board, or any one or more of such

commodities, as the context may indicate.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 518, as added June 21, 1941,

ch. 214, Sec. 9, 55 Stat. 256; amended Dec. 23, 1944, ch. 713, Sec.

4, 58 Stat. 919; Aug. 25, 1949, ch. 512, Sec. 9, 63 Stat. 665; Pub.

L. 96-365, title I, Sec. 111, Sept. 26, 1980, 94 Stat. 1319; Pub.

L. 102-237, title VI, Sec. 601(6), Dec. 13, 1991, 105 Stat. 1878;

Pub. L. 103-354, title I, Sec. 119(f)(3), Oct. 13, 1994, 108 Stat.

3208; Pub. L. 106-224, title I, Sec. 132(b), June 20, 2000, 114

Stat. 386.)

-MISC1-

PRIOR PROVISIONS

A former section 1518, act Feb. 16, 1938, ch. 30, title V, Sec.

518, 52 Stat. 77, was transferred to section 1519 of this title at

the time of the renumbering of such section 518 of act Feb. 16,

1938, as section 519 by act June 21, 1941, ch. 214, Sec. 9, 55

Stat. 256.

AMENDMENTS

2000 - Pub. L. 106-224 struck out ''livestock and'' before

''stored grain'' and ''under subsection (a) or (m) of section 1508

of this title'' after ''by the Board''.

1994 - Pub. L. 103-354 substituted ''(m)'' for ''(k)'' after

''subsection (a) or''.

1991 - Pub. L. 102-237 substituted ''subsection (a) or (k)'' for

''subsection (a) or (i)''.

1980 - Pub. L. 96-365 extended definition of ''agricultural

commodity'' to include tomatoes, grain sorghum, sunflowers,

raisins, oranges, sweet corn, dry peas, freezing and canning peas,

forage, apples, grapes, nursery crops, and aquacultural species as

illustrated but not limited, excluded livestock and stored grain,

substituted ''sugar cane'' for ''sugarcane'', and inserted

reference to subsec. (i) of section 1508 of this title.

1949 - Act Aug. 25, 1949, amended section to correct a clerical

error in citation of ''subsection (a) of section 1508''.

1944 - Act Dec. 23, 1944, increased scope of definition of

''agricultural commodity'' from ''wheat or cotton'' to include all

crops now set out.

EFFECTIVE DATE OF 2000 AMENDMENT

Amendment by Pub. L. 106-224 effective Oct. 1, 2000, see section

171(b)(1)(A) of Pub. L. 106-224, set out as a note under section

1501 of this title.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-365 effective Sept. 26, 1980, see section

112 of Pub. L. 96-365, set out as a note under section 1504 of this

title.

-CITE-

7 USC Sec. 1519 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1519. Repealed. Pub. L. 104-127, title I, Sec. 196(j), Apr. 4,

1996, 110 Stat. 950

-MISC1-

Section, act Feb. 16, 1938, ch. 30, title V, Sec. 519, formerly

Sec. 518, 52 Stat. 77; renumbered Sec. 519, June 21, 1941, ch. 214,

Sec. 9, 55 Stat. 256; amended Oct. 13, 1994, Pub. L. 103-354, title

I, Sec. 111, 112, 108 Stat. 3199, 3202, related to noninsured crop

disaster assistance program. See section 7333 of this title.

-CITE-

7 USC Sec. 1520 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1520. Producer eligibility

-STATUTE-

Except as otherwise provided in this chapter, a producer shall

not be denied insurance under this chapter if -

(1) for purposes of catastrophic risk protection coverage, the

producer is a ''person'' (as defined by the Secretary); and

(2) for purposes of any other plan of insurance, the producer

is 18 years of age and has a bona fide insurable interest in a

crop as an owner-operator, landlord, tenant, or sharecropper.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 520, as added Pub. L. 92-357,

July 28, 1972, 86 Stat. 501; amended Pub. L. 103-354, title I, Sec.

113, Oct. 13, 1994, 108 Stat. 3203.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 substituted ''Producer eligibility'' for

''Persons under twenty-one years of age'' in section catchline and

amended text generally. Prior to amendment, text read as follows:

''Notwithstanding any other provision of law, no person shall be

denied insurance under this chapter solely on the ground that he is

under twenty-one years of age if such person is (1) over eighteen

years of age, and (2) has a bona fide insurable interest in a crop

as an owner-operator, landlord, tenant or sharecropper: Provided,

That any such person who enters into a Federal Crop Insurance

contract shall be subject to the same legal liability and have the

same legal rights with respect to such contract as any person over

the age of twenty-one years.''

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-354 effective Oct. 13, 1994, and

applicable to provision of crop insurance under Federal Crop

Insurance Act (7 U.S.C. 1501 et seq.) beginning with 1995 crop

year, with such Act, as in effect on the day before Oct. 13, 1994,

to continue to apply with respect to 1994 crop year, see section

120 of Pub. L. 103-354, set out as a note under section 1502 of

this title.

-CITE-

7 USC Sec. 1521 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1521. Ineligibility for catastrophic risk and noninsured

assistance payments

-STATUTE-

If the Secretary determines that a person has knowingly adopted a

material scheme or device to obtain catastrophic risk, additional

coverage, or noninsured assistance benefits under this chapter to

which the person is not entitled, has evaded this chapter, or has

acted with the purposes of evading this chapter, the person shall

be ineligible to receive all benefits applicable to the crop year

for which the scheme or device was adopted. The authority provided

by this section shall be in addition to, and shall not supplant,

the authority provided by section 1506(n) of this title.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 521, as added Pub. L.

103-354, title I, Sec. 114, Oct. 13, 1994, 108 Stat. 3203.)

-MISC1-

EFFECTIVE DATE

Section effective Oct. 13, 1994, and applicable to provision of

crop insurance under Federal Crop Insurance Act (7 U.S.C. 1501 et

seq.) beginning with 1995 crop year, with such Act, as in effect on

the day before Oct. 13, 1994, to continue to apply with respect to

1994 crop year, see section 120 of Pub. L. 103-354, set out as an

Effective Date of 1994 Amendment note under section 1502 of this

title.

-CITE-

7 USC Sec. 1522 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1522. Research and development

-STATUTE-

(a) Definition of policy

In this section, the term ''policy'' means a policy, plan of

insurance, provision of a policy or plan of insurance, and related

materials.

(b) Reimbursement of research, development, and maintenance costs

(1) Research and development reimbursement

The Corporation shall provide a payment to reimburse an

applicant for research and development costs directly related to

a policy that is -

(A) submitted to the Board and approved by the Board under

section 1508(h) of this title for reinsurance; and

(B) if applicable, offered for sale to producers.

(2) Existing plans

The Corporation shall reimburse costs associated with research

and development costs directly related to a policy that was

approved by the Board prior to June 20, 2000.

(3) Marketability

The Corporation shall approve a reimbursement under paragraph

(1) or (2) only after determining that the policy is marketable

based on a reasonable marketing plan, as determined by the Board.

(4) Maintenance payments

(A) Requirement

The Corporation shall reimburse maintenance costs associated

with the annual cost of underwriting for a policy described in

paragraphs (1) and (2).

(B) Duration

Payments with respect to maintenance costs may be provided

for a period of not more than four reinsurance years subsequent

to Board approval for payment under this subsection.

(C) Options for maintenance

On the expiration of the 4-year period described in

subparagraph (B), the approved insurance provider responsible

for maintenance of the policy may -

(i) maintain the policy and charge a fee to approved

insurance providers that elect to sell the policy under this

subsection; or

(ii) transfer responsibility for maintenance of the policy

to the Corporation.

(D) Fee

(i) Amount

Subject to approval by the Board, the amount of the fee

that is payable by an approved insurance provider that elects

to sell the policy shall be an amount that is determined by

the approved insurance provider maintaining the policy.

(ii) Approval

The Board shall approve the amount of a fee determined

under clause (i) for maintenance of the policy unless the

Board determines that the amount of the fee -

(I) is unreasonable in relation to the maintenance costs

associated with the policy; or

(II) unnecessarily inhibits the use of the policy.

(5) Treatment of payment

Payments made under this subsection for a policy shall be

considered as payment in full by the Corporation for the research

and development conducted with regard to the policy and any

property rights to the policy.

(6) Reimbursement amount

The Corporation shall determine the amount of the payment under

this subsection for an approved policy based on the complexity of

the policy and the size of the area in which the policy or

material is expected to be sold.

(c) Research and development contracting authority

(1) Authority

The Corporation may enter into contracts to carry out research

and development to -

(A) increase participation in States in which the Corporation

determines that -

(i) there is traditionally, and continues to be, a low

level of Federal crop insurance participation and

availability; and

(ii) the State is underserved by the Federal crop insurance

program;

(B) increase participation in areas that are underserved by

the Federal crop insurance program; and

(C) increase participation by producers of underserved

agricultural commodities, including specialty crops.

(2) Underserved agricultural commodities and areas

(A) Authority

The Corporation may enter into contracts under procedures

prescribed by the Corporation with qualified persons to carry

out research and development for policies that promote the

purposes of paragraph (1).

(B) Consultation

Before entering into a contract under subparagraph (A), the

Corporation shall consult with groups representing producers of

agricultural commodities that would be served by the policies

that are the subject of the research and development.

(3) Qualified persons

A person with experience in crop insurance or farm or ranch

risk management (including a college or university, an approved

insurance provider, and a trade or research organization), as

determined by the Corporation, shall be eligible to enter into a

contract with the Corporation under this subsection.

(4) Types of contracts

A contract under this subsection may provide for research and

development regarding new or expanded policies, including

policies based on adjusted gross income, cost-of-production,

quality losses, and an intermediate base program with a higher

coverage and cost than catastrophic risk protection.

(5) Use of resulting policies

The Corporation may offer any policy developed under this

subsection that is approved by the Board.

(6) Research and development priorities

The Corporation shall establish as one of the highest research

and development priorities of the Corporation the development of

a pasture, range, and forage program.

(7) Study of multiyear coverage

(A) In general

The Corporation shall contract with a qualified person to

conduct a study to determine whether offering policies that

provide coverage for multiple years would reduce fraud, waste,

and abuse by persons that participate in the Federal crop

insurance program.

(B) Report

Not later than 1 year after June 20, 2000, the Corporation

shall submit to the Committee on Agriculture of the House of

Representatives and the Committee on Agriculture, Nutrition,

and Forestry of the Senate a report that describes the results

of the study conducted under subparagraph (A).

(8) Contract for revenue coverage plans

The Corporation shall enter into a contract for research and

development regarding one or more revenue coverage plans that are

designed to enable producers to take maximum advantage of

fluctuations in market prices and thereby maximize revenue

realized from the sale of an agricultural commodity. A revenue

coverage plan may include the use of existing market instruments

or the development of new market instruments. Not later than 15

months after June 20, 2000, the Corporation shall submit to the

Committee on Agriculture of the House of Representatives and the

Committee on Agriculture, Nutrition, and Forestry of the Senate a

report that describes the results of the contract entered into

under this paragraph.

(9) Contract for cost of production policy

(A) Authority

The Corporation shall enter into a contract for research and

development regarding a cost of production policy.

(B) Research and development

The research and development shall -

(i) take into consideration the differences in the cost of

production on a county-by-county basis; and

(ii) cover as many commodities as is practicable.

(10) Relation to limitations

A policy developed under this subsection may be prepared

without regard to the limitations of this chapter, including -

(A) the requirement concerning the levels of coverage and

rates; and

(B) the requirement that the price level for each insured

agricultural commodity must equal the expected market price for

the agricultural commodity, as established by the Board.

(d) Partnerships for risk management development and implementation

(1) Purpose

The purpose of this subsection is to authorize the Corporation

to enter into partnerships with public and private entities for

the purpose of increasing the availability of loss mitigation,

financial, and other risk management tools for producers, with a

priority given to risk management tools for producers of

agricultural commodities covered by section 7333 of this title,

specialty crops, and underserved agricultural commodities.

(2) Authority

The Corporation may enter into partnerships with the

Cooperative State Research, Education, and Extension Service, the

Agricultural Research Service, the National Oceanic Atmospheric

Administration, and other appropriate public and private entities

with demonstrated capabilities in developing and implementing

risk management and marketing options for producers of specialty

crops and underserved agricultural commodities.

(3) Objectives

The Corporation may enter into a partnership under paragraph

(2) -

(A) to enhance the notice and timeliness of notice of weather

conditions that could negatively affect crop yields, quality,

and final product use in order to allow producers to take

preventive actions to increase end product profitability and

marketability and to reduce the possibility of crop insurance

claims;

(B) to develop a multifaceted approach to pest management and

fertilization to decrease inputs, decrease environmental

exposure, and increase application efficiency;

(C) to develop or improve techniques for planning, breeding,

planting, growing, maintaining, harvesting, storing, shipping,

and marketing that will address quality and quantity challenges

associated with year-to-year and regional variations;

(D) to clarify labor requirements and assist producers in

complying with requirements to better meet the physically

intense and time-compressed planting, tending, and harvesting

requirements associated with the production of specialty crops

and underserved agricultural commodities;

(E) to provide assistance to State foresters or equivalent

officials for the prescribed use of burning on private forest

land for the prevention, control, and suppression of fire;

(F) to provide producers with training and informational

opportunities so that the producers will be better able to use

financial management, crop insurance, marketing contracts, and

other existing and emerging risk management tools; and

(G) to develop other risk management tools to further

increase economic and production stability.

(e) Funding

(1) Reimbursements

Of the amounts made available from the insurance fund

established under section 1516(c) of this title, the Corporation

may use to provide reimbursements under subsection (b) of this

section not more than $10,000,000 for each of fiscal years 2001

and 2002 and not more than $15,000,000 for fiscal year 2003 and

each subsequent fiscal year.

(2) Contracting

(A) Authority

Of the amounts made available from the insurance fund

established under section 1516(c) of this title, the

Corporation may use to carry out contracting and partnerships

under subsections (c) and (d) of this section not more than

$20,000,000 for each of fiscal years 2001 through 2003 and not

more than $25,000,000 for fiscal year 2004 and each subsequent

fiscal year.

(B) Underserved States

Of the amount made available under subparagraph (A) for a

fiscal year, the Corporation shall use not more than $5,000,000

for the fiscal year to carry out contracting for research and

development to carry out the purpose described in subsection

(c)(1)(A) of this section.

(3) Unused funding

If the Corporation determines that the amount available to

provide either reimbursement payments or contract payments under

this section for a fiscal year is not needed for such purposes,

the Corporation may use the excess amount to carry out another

function authorized under this section.

(4) Prohibited research and development by Corporation

(A) New policies

Notwithstanding subsection (d) of this section, on and after

October 1, 2000, the Corporation shall not conduct research and

development for any new policy for an agricultural commodity

offered under this chapter.

(B) Existing policies

Any policy developed by the Corporation under this chapter

before that date may continue to be offered for sale to

producers.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 522, as added Pub. L.

106-224, title I, Sec. 131, June 20, 2000, 114 Stat. 379.)

-MISC1-

EFFECTIVE DATE

Section effective Oct. 1, 2000, see section 171(b)(1)(A) of Pub.

L. 106-224, set out as an Effective Date of 2000 Amendment note

under section 1501 of this title.

REIMBURSEMENT REGULATIONS

Pub. L. 107-20, title II, Sec. 2103, July 24, 2001, 115 Stat.

165, provided that:

''(a) Not later than August 1, 2001, the Federal Crop Insurance

Corporation shall promulgate final regulations to carry out section

522(b) of the Federal Crop Insurance Act (7 U.S.C. 522(b)

(1522(b))), without regard to -

''(1) the notice and comment provisions of section 553 of title

5, United States Code;

''(2) the Statement of Policy of the Secretary of Agriculture

effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices

of proposed rulemaking and public participation in rulemaking;

and

''(3) chapter 35 of title 44, United States Code (commonly

known as the 'Paperwork Reduction Act').

''(b) In carrying out this section, the Corporation shall use the

authority provided under section 808 of title 5, United States

Code.

''(c) The final regulations promulgated under subsection (a)

shall take effect on the date of publication of the final

regulations.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1508, 1516, 1523 of this

title.

-CITE-

7 USC Sec. 1523 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1523. Pilot programs

-STATUTE-

(a) General provisions

(1) Authority

Except as otherwise provided in this section, the Corporation

may conduct a pilot program submitted to and approved by the

Board under section 1508(h) of this title, or that is developed

under subsection (b) of this section or section 1522 of this

title, to evaluate whether a proposal or new risk management tool

tested by the pilot program is suitable for the marketplace and

addresses the needs of producers of agricultural commodities.

(2) Private coverage

Under this section, the Corporation shall not conduct any pilot

program that provides insurance protection against a risk if

insurance protection against the risk is generally available from

private companies.

(3) Covered activities

The pilot programs described in paragraph (1) may include pilot

programs providing insurance protection against losses involving

-

(A) reduced forage on rangeland caused by drought or insect

infestation;

(B) livestock poisoning and disease;

(C) destruction of bees due to the use of pesticides;

(D) unique special risks related to fruits, nuts, vegetables,

and specialty crops in general, aquacultural species, and

forest industry needs (including appreciation);

(E) after October 1, 2001, wild salmon, except that -

(i) any pilot program with regard to wild salmon may be

carried out without regard to the limitations of this

chapter; and

(ii) the Corporation shall conduct all wild salmon programs

under this chapter so that, to the maximum extent

practicable, all costs associated with conducting the

programs are not expected to exceed $1,000,000 for fiscal

year 2002 and each subsequent fiscal year.

(4) Scope of pilot programs

The Corporation may -

(A) approve a pilot program under this section to be

conducted on a regional, State, or national basis after

considering the interests of affected producers and the

interests of, and risks to, the Corporation;

(B) operate the pilot program, including any modifications of

the pilot program, for a period of up to 4 years;

(C) extend the time period for the pilot program for

additional periods, as determined appropriate by the

Corporation; and

(D) provide pilot programs that would allow producers -

(i) to receive a reduced premium for using whole farm units

or single crop units of insurance; and

(ii) to cross State and county boundaries to form insurable

units.

(5) Evaluation

(A) Requirement

After the completion of any pilot program under this section,

the Corporation shall evaluate the pilot program and submit to

the Committee on Agriculture of the House of Representatives

and the Committee on Agriculture, Nutrition, and Forestry of

the Senate a report on the operations of the pilot program.

(B) Evaluation and recommendations

The report shall include an evaluation by the Corporation of

the pilot program and the recommendations of the Corporation

with respect to implementing the program on a national basis.

(b) Livestock pilot programs

(1) Definition of livestock

In this subsection, the term ''livestock'' includes, but is not

limited to, cattle, sheep, swine, goats, and poultry.

(2) Programs required

Subject to paragraph (7), the Corporation shall conduct two or

more pilot programs to evaluate the effectiveness of risk

management tools for livestock producers, including the use of

futures and options contracts and policies and plans of insurance

that protect the interests of livestock producers and that

provide -

(A) livestock producers with reasonable protection from the

financial risks of price or income fluctuations inherent in the

production and marketing of livestock; or

(B) protection for production losses.

(3) Purpose of programs

To the maximum extent practicable, the Corporation shall

evaluate the greatest number and variety of pilot programs

described in paragraph (2) to determine which of the offered risk

management tools are best suited to protect livestock producers

from the financial risks associated with the production and

marketing of livestock.

(4) Timing

The Corporation shall begin conducting livestock pilot programs

under this subsection during fiscal year 2001.

(5) Relation to other limitations

Any policy or plan of insurance offered under this subsection

may be prepared without regard to the limitations of this

chapter.

(6) Assistance

As part of a pilot program under this subsection, the

Corporation may provide reinsurance for policies or plans of

insurance and subsidize the purchase of futures and options

contracts or policies and plans of insurance offered under the

pilot program.

(7) Private insurance

No action may be undertaken with respect to a risk under this

subsection if the Corporation determines that insurance

protection for livestock producers against the risk is generally

available from private companies.

(8) Location

The Corporation shall conduct the livestock pilot programs

under this subsection in a number of counties that is determined

by the Corporation to be adequate to provide a comprehensive

evaluation of the feasibility, effectiveness, and demand among

producers for the risk management tools evaluated in the pilot

programs.

(9) Eligible producers

Any producer of a type of livestock covered by a pilot program

under this subsection that owns or operates a farm or ranch in a

county selected as a location for that pilot program shall be

eligible to participate in that pilot program.

(10) Limitation on expenditures

The Corporation shall conduct all livestock programs under this

chapter so that, to the maximum extent practicable, all costs

associated with conducting the livestock programs (other than

research and development costs covered by section 1522 of this

title) are not expected to exceed the following:

(A) $10,000,000 for each of fiscal years 2001 and 2002.

(B) $15,000,000 for fiscal year 2003.

(C) $20,000,000 for fiscal year 2004 and each subsequent

fiscal year.

(c) Revenue insurance pilot program

(1) In general

Subject to section 1522(e)(4) of this title, the Secretary

shall carry out a pilot program in a limited number of counties,

as determined by the Secretary, for crop years 1997 through 2001,

under which a producer of wheat, feed grains, soybeans, or such

other commodity as the Secretary considers appropriate may elect

to receive insurance against loss of revenue, as determined by

the Secretary.

(2) Administration

Revenue insurance under this subsection shall -

(A) be offered through reinsurance arrangements with private

insurance companies;

(B) offer at least a minimum level of coverage that is an

alternative to catastrophic crop insurance;

(C) be actuarially sound; and

(D) require the payment of premiums and administrative fees

by an insured producer.

(d) Premium rate reduction pilot program

(1) Purpose

The purpose of the pilot program established under this

subsection is to determine whether approved insurance providers

will compete to market policies or plans of insurance with

reduced rates of premium, in a manner that maintains the

financial soundness of approved insurance providers and is

consistent with the integrity of the Federal crop insurance

program.

(2) Establishment

(A) In general

Beginning with the 2002 crop year, the Corporation shall

establish a pilot program under which approved insurance

providers may propose for approval by the Board policies or

plans of insurance with reduced rates of premium -

(i) for one or more agricultural commodities; and

(ii) within a limited geographic area, as proposed by the

approved insurance provider and approved by the Board.

(B) Determination by Board

The Board shall approve a policy or plan of insurance

proposed under this subsection that involves a premium

reduction if the Board determines that -

(i) the interests of producers are adequately protected

within the pilot area;

(ii) rates of premium are actuarially appropriate, as

determined by the Board;

(iii) the size of the proposed pilot area is adequate;

(iv) the proposed policy or plan of insurance would not

unfairly discriminate among producers within the proposed

pilot area;

(v) if the proposed policy or plan of insurance were

available in a geographic area larger than the proposed pilot

area, the proposed policy or plan of insurance would -

(I) not have a significant adverse impact on the crop

insurance delivery system;

(II) not result in a reduction of program integrity;

(III) be actuarially appropriate; and

(IV) not place an additional financial burden on the

Federal Government; and

(vi) the proposed policy or plan of insurance meets other

requirements of this chapter determined appropriate by the

Board.

(C) Time limitations and procedures

The time limitations and procedures of the Board established

under section 1508(h) of this title shall apply to a proposal

submitted under this subsection.

(e) Adjusted gross revenue insurance pilot program

(1) In general

The Corporation shall carry out, through at least the 2004

reinsurance year, the adjusted gross revenue insurance pilot

program in effect for the 2002 reinsurance year.

(2) Additional counties

(A) In general

In addition to counties otherwise included in the pilot

program, the Corporation shall include in the pilot program for

the 2003 reinsurance year at least 8 counties in the State of

California and at least 8 counties in the State of

Pennsylvania.

(B) Selection criteria

In carrying out subparagraph (A), the Corporation shall work

with the respective State Departments of Agriculture to

establish criteria to determine which counties to include in

the pilot program.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 523, as added Pub. L.

106-224, title I, Sec. 132(a), June 20, 2000, 114 Stat. 383;

amended Pub. L. 107-171, title X, Sec. 10004, May 13, 2002, 116

Stat. 487.)

-MISC1-

AMENDMENTS

2002 - Subsec. (e). Pub. L. 107-171 added subsec. (e).

EFFECTIVE DATE

Section effective Oct. 1, 2000, see section 171(b)(1)(A) of Pub.

L. 106-224, set out as an Effective Date of 2000 Amendment note

under section 1501 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1507, 1508, 1516 of this

title.

-CITE-

7 USC Sec. 1524 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 36 - CROP INSURANCE

-HEAD-

Sec. 1524. Education and risk management assistance

-STATUTE-

(a) Education assistance

(1) In general

Subject to the amounts made available under paragraph (4) -

(A) the Corporation shall carry out the program established

under paragraph (2); and

(B) the Secretary, acting through the Cooperative State

Research, Education, and Extension Service, shall carry out the

program established under paragraph (3).

(2) Education and information

The Corporation shall establish a program under which crop

insurance education and information is provided to producers in

States in which (as determined by the Secretary) -

(A) there is traditionally, and continues to be, a low level

of Federal crop insurance participation and availability; and

(B) producers are underserved by the Federal crop insurance

program.

(3) Partnerships for risk management education

(A) Authority

The Secretary, acting through the Cooperative State Research,

Education, and Extension Service, shall establish a program

under which competitive grants are made to qualified public and

private entities (including land grant colleges, cooperative

extension services, and colleges or universities), as

determined by the Secretary, for the purpose of educating

agricultural producers about the full range of risk management

activities, including futures, options, agricultural trade

options, crop insurance, cash forward contracting, debt

reduction, production diversification, farm resources risk

reduction, and other risk management strategies.

(B) Basis for grants

A grant under this paragraph shall be awarded on the basis of

merit and shall be subject to peer or merit review.

(C) Obligation period

Funds for a grant under this paragraph shall be available to

the Secretary for obligation for a 2-year period.

(D) Administrative costs

The Secretary may use not more than 4 percent of the funds

made available for grants under this paragraph for

administrative costs incurred by the Secretary in carrying out

this paragraph.

(4) Funding

From the insurance fund established under section 1516(c) of

this title, there is transferred -

(A) for the education and information program established

under paragraph (2), $5,000,000 for fiscal year 2001 and each

subsequent fiscal year; and

(B) for the partnerships for risk management education

program established under paragraph (3), $5,000,000 for fiscal

year 2001 and each subsequent fiscal year.

(b) Agricultural management assistance

(1) Authority

The Secretary shall provide financial assistance to producers

in the States of Connecticut, Delaware, Maryland, Massachusetts,

Maine, Nevada, New Hampshire, New Jersey, New York, Pennsylvania,

Rhode Island, Utah, Vermont, West Virginia, and Wyoming.

(2) Uses

A producer may use financial assistance provided under this

subsection to -

(A) construct or improve -

(i) watershed management structures; or

(ii) irrigation structures;

(B) plant trees to form windbreaks or to improve water

quality;

(C) mitigate financial risk through production or marketing

diversification or resource conservation practices, including -

(i) soil erosion control;

(ii) integrated pest management;

(iii) organic farming; or

(iv) to develop and implement a plan to create marketing

opportunities for the producer, including through value-added

processing;

(D) enter into futures, hedging, or options contracts in a

manner designed to help reduce production, price, or revenue

risk;

(E) enter into agricultural trade options as a hedging

transaction to reduce production, price, or revenue risk; or

(F) conduct any other activity relating to an activity

described in subparagraphs (A) through (E), as determined by

the Secretary.

(3) Payment limitation

The total amount of payments made to a person (as defined in

section 1308(5) (FOOTNOTE 1) of this title) under this subsection

for any year may not exceed $50,000.

(FOOTNOTE 1) See References in Text note below.

(4) Commodity Credit Corporation

(A) In general

The Secretary shall carry out this subsection through the

Commodity Credit Corporation.

(B) Funding

(i) In general

Except as provided in clause (ii), the Commodity Credit

Corporation shall make available to carry out this subsection

not less than $10,000,000 for each fiscal year.

(ii) Exception

For each of fiscal years 2003 through 2007, the Commodity

Credit Corporation shall make available to carry out this

subsection $20,000,000.

-SOURCE-

(Feb. 16, 1938, ch. 30, title V, Sec. 524, as added Pub. L.

106-224, title I, Sec. 133, June 20, 2000, 114 Stat. 387; amended

Pub. L. 107-171, title II, Sec. 2501, May 13, 2002, 116 Stat. 263.)

-REFTEXT-

REFERENCES IN TEXT

Section 1308(5) of this title, referred to in subsec. (b)(3), was

redesignated section 1308(e) by Pub. L. 107-171, title I, Sec.

1603(b)(1), May 13, 2002, 116 Stat. 214.

-MISC2-

AMENDMENTS

2002 - Subsec. (b). Pub. L. 107-171 added subsec. (b) and struck

out heading and text of former subsec. (b). Text read as follows:

''(1) Authority. - The Secretary shall provide cost share

assistance to producers, in a manner determined by the Secretary,

in not less than 10, nor more than 15, States in which

participation in the Federal crop insurance program is historically

low, as determined by the Secretary.

''(2) Uses. - A producer may use cost share assistance provided

under this subsection to -

''(A) construct or improve -

''(i) watershed management structures; or

''(ii) irrigation structures;

''(B) plant trees to form windbreaks or to improve water

quality;

''(C) mitigate financial risk through production

diversification or resource conservation practices, including -

''(i) soil erosion control;

''(ii) integrated pest management; or

''(iii) transition to organic farming;

''(D) enter into futures, hedging, or options contracts in a

manner designed to help reduce production, price, or revenue

risk;

''(E) enter into agricultural trade options as a hedging

transaction to reduce production, price, or revenue risk; or

''(F) conduct any other activity related to the activities

described in subparagraphs (A) through (E), as determined by the

Secretary.''

''(2) Payment limitation. - The total amount of payments made to

a person (as defined in section 1308(5) of this title) under this

subsection for any year may not exceed $50,000.

''(3) Commodity credit corporation. -

''(A) In general. - The Secretary shall carry out this

subsection through the Commodity Credit Corporation.

''(B) Funding. - The Commodity Credit Corporation shall make

available to carry out this subsection $10,000,000 for fiscal

year 2001 and each subsequent fiscal year.''

EFFECTIVE DATE

Section effective Oct. 1, 2000, see section 171(b)(1)(A) of Pub.

L. 106-224, set out as an Effective Date of 2000 Amendment note

under section 1501 of this title.

-CITE-